Transfer pricing - application, enforcement and documentation (12-Jan-2016)

Transfer pricing is a rather complex subject and is a topic that most persons are not familiar with. Many may not even be aware that they could fall under transfer pricing audits by the Inland Revenue Board and as such, they are not prepared with the necessary pricing policies or documentation with which they could defend themselves.

KEY TOPICS COVERED
1) Transfer pricing
a) The law – Sections 140, 140a, and transfer pricing rules
• Tangibles and intangibles
b) What are transfer pricing trigger factors?
c) The various acceptable pricing methodologies

2) Cross-border/inter-company transactions
a) Transfer pricing and arm’s length dealings
• What constitutes “related parties”?
• Control – directors and equity
• Transfer pricing and individuals

3) Transfer pricing “contemporaneous documentation”
a) What is “contemporaneous documentation”?
b) Who must prepare and approve it
c) Changes and reviews
d) Internal and external comparables
e) Advance pricing arrangements and advance rulings
f) Lessons from the Glaxo case
g) Revenue action – finalisation, penalties, and appeals

AGREED BY LEMBAGA HASIL DALAM NEGERI MALAYSIA (LHDNM)
The topic discussed in the workshop was agreed upon by LHDNM and the CPD hours are recognised by Ministry of Finance as Continuing Professional Development (CPD)/Continuing Professional Education (CPE) points for the application and renewal of tax agent license.

Learning objectives

• To introduce participants to this new challenging topic and to help them understand its relevance to the business activities they carry out
• To explain the various provisions of the relevant law, that is, Sections 140, 140A, and The Transfer Pricing Rules 2012
• To inform what the Director General’s authority is regarding this subject and the adjustments he could make
• To explain the pricing policies participants should put into place and the various pricing methodologies they could adopt
• To examine the requirements of contemporaneous transfer pricing
• Documentation, what it means, and how they should be prepared and maintained
• To review the trigger factors that could prompt the Director General to select a  company or individual for investigations and the best way to comply with the law
• To go through Revenue’s transfer pricing guidelines and learn how to conduct their business in a way that minimises exposure to additional taxes and penalties

SPEAKER’S PROFILE
Mr Vincent Josef
Vincent began his career with the Inland Revenue Board (IRB) in 1968 and for the past 35 years’ has served in various branches. Prior to his retirement, he was with the operations division of the board headquarters where he held the position of assistant director general.
In addition, he has broad experience in lecturing at IRB events and Malaysian professional institutions including the CPA Australia, Chartered Tax Institute of Malaysia, Malaysian Institute of Accountants, Federation of Investment Managers Malaysia, MAICSA and Commerce
Clearing House (CCH) Malaysia.

Audience

Directors and senior corporate officers, accountants, auditors, financial managers, company secretaries and tax practitioners