Malaysia Stresses TP Audits – Hires More Staff

July 12, 2018

Malaysia Stresses TP Audits – Hires More Staff

~1-minute read. This article is part of our CrossBorder Audit Alert series.

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Malaysian Tax Authority Hires More Transfer Pricing Auditors

 

In 2017, 272 intelligence officers and tax investigators were hired and charged with looking into potential transfer pricing violations.

Investigators aim to achieve collection of MYR 2B through these efforts by the end of the year, according to the Ministry of Finance. This is a rising trend for the state, as in 2015, the number of transfer pricing examinations increased to 250 from 168 in 2014.

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In an attempt to raise revenue and lower the budget deficit, HM Revenue and Customs announced that that between 2011-2016, HMRC secured 5.9 billion of additional tax by challenging the transfer pricing arrangements of multinational corporations! The total amount secured in 2016/17 was 1.6B which was a 50% increase over the amount collected in 2015/16.

Similarly, the Diverted Profit Tax, which is designed to encourage large companies to comply with international tax rules including transfer pricing, raised 281M in 2016/17. This was a 90% increase from 2015/2016.

To collect this amount, the HMRC has 82 full time staff in its specialist transfer pricing group. This number is expected to increase dramatically.

CrossBorder Solutions predicts that this upward trend will continue and MNC taxpayers should expect transfer pricing audits and adjustments to increase dramatically.

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