The Malaysian Inland Revenue Board announced plans to introduce a Country-by-Country reporting requirement and to update current local transfer pricing documentation requirements to include the Master File and Local File concepts, in line with Action 13 of the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting project on 24 March 2016.
The CbC reporting and new transfer pricing documentation requirements are expected to be effective in Malaysia from 1 January 2017, with the first filing of the CbC reports by 31 December 2018. The transfer pricing documentation submission requirement would remain unchanged. Therefore, transfer pricing documentation is not required to be submitted with the tax return, but must be made available to the Malaysian Inland Revenue Board within 30 days upon request.
The CbC reports will automatically be shared with foreign tax administrators pursuant to the Multilateral Competent Authority Agreement which Malaysia has signed.
