The Inland Revenue Board of Malaysia issued the income tax (Country-by-Country Reporting) rules (“CbCR Rules”) on 23 December 2016 which came into effect on 1 January 2017. The CbC rules apply to Malaysian-parented multinational corporate groups with total consolidated group revenue of at least Malaysian Ringgit (RM) 3 billion in the financial year preceding the reporting financial year. The MNC group carries out cross- border transactions with constituent entities owned or controlled by the MNC group in other tax jurisdictions.
Each Malaysian resident entity of the MNE group that is subject to the CbC reporting requirement must notify the Director General, in writing, of who is the MNE group’s reporting entity on or before the last day of the reporting financial year. For example a MNC group which has a financial year ending 31 December 2017, will be required to file the CbCR no later than 31 December 2018. A MNC group with a financial year ending in March (i.e. 1 April 2017 to 31 March 2018) will be required to file the CbCR no later than 31 March 2019. The CbCR must be filed no later than 12 months after the end of the financial year.
The CbC report must include information on a country-by-country basis relating to the multinational group including information about income, taxes paid, employees, and the nature of business activity.