Transfer Pricing: LHDN’s Enhanced Powers, ‘Arm’s Length’ Changes, and Compliance

Today we dive into the complex world of transfer pricing and the notable changes in LHDN’s approach to transfer pricing calculations and compliance that come into play for the year of assessment of 2023, and beyond, which means this year’s tax fillings. Joining us to break all this down and more is Philip Yeoh, Transfer Pricing Executive Director at Deloitte.

We'll start with the basics of transfer pricing to get a foundational understanding of the concept, before discussing what defines a 'related party transaction', break down the concept of 'arm's length price', and explore the consequences of non-compliance with the transfer pricing rules.

We’ll then get into the changes introduced, including the enhanced powers granted to the Inland Revenue Board (IRB) to adjust a company’s transfer pricing, the potential implications for businesses, and how these changes impact the preparation and submission of transfer pricing documentation.