IRBM revises penalty and surcharge rules in the updated guidelines.
The Inland Revenue Board of Malaysia (IRBM) has issued the Malaysia Transfer Pricing Tax Audit Framework 2025 on 31 July 2025, replacing the previous Transfer Pricing Tax Audit Framework 2024. The key updates include changes to the penalty and surcharge structures for transfer pricing audit adjustments.
Under the revised penalty structure, a 100% penalty applies to tax undercharged due to understatement or omission of income identified in an audit. However, the rate is 15% for a first offence, 30% for a second offence, and 45% for a third offence. In the 2024 guidelines, this structure applied to audit cases starting before 1 January 2021. The 2025 guidelines amend this so that it applies to transfer pricing adjustments for basis periods commencing before 1 January 2021.
For surcharges, a 5% rate applies to adjustments arising from a transfer pricing audit, with a possible reduction to between 0% and 4% for voluntary disclosures. The 2024 guidelines applied this to audit cases starting on or after 1 January 2021. The 2025 guidelines change this so that it applies to transfer pricing adjustments for basis periods commencing on or after 1 January 2021.
The IRBM has also released updated FAQs relating to the surcharge applicable from 2021, including four revised questions and answers.
Earlier, IRBM updated transfer pricing guidelines and transfer pricing audit framework.
