On 16 June 2020, the Malaysian Inland Revenue Board posted online FAQs on advance pricing arrangement (APA) procedures for businesses due to the coronavirus pandemic. The questionnaire covers the filing of new APA applications; the treatment of ongoing and concluded APA applications; and the renewal process of expiring APAs.
IRBM is currently not accepting any new APA application from businesses affected by Covid-19 pandemic until further notice since the outlook of the Covid-19 pandemic is still highly uncertain. For businesses which are not impacted by Covid19, taxpayer can still proceed with APA application.
The review process of an on-going APA application request is based on the information previously submitted to the IRBM. The proposed arm’s length range will be based on the benchmarking analysis of normal economic and market conditions i.e. pre-Covid-19 period.
Taxpayer can continue with the on-going APA based on information previously submitted to IRBM or taxpayer can withdraw from the APA application if the probability of the impact of Covid-19 on taxpayer’s business is significant. Taxpayer does not qualify for a renewal if the critical assumptions in the expiring APA are no longer valid or relevant due to material changes on taxpayer’s business as a result of Covid-19 pandemic. Hence, under such circumstances, the taxpayer may file a new APA application or choose not to submit a new APA application.
The guidance will be updated from time to time based on current development and circumstances relating to Covid-19 impacts and issues.
