At a glance
#Dates are for an example year end of Dec 31, 2025. Where local law moves a deadline on a weekend or national public holiday to the next working day, the date shown is already moved. Use the Deadlines tool for your own year end and thresholds.
Verified 2026-10-26. Tax authority: Inland Revenue Board of Malaysia (IRBM, also LHDN or HASiL). Summaries are simplified; check the linked official source before relying on them.
The law
#The arm's length rule is section 140A of the Income Tax Act 1967 (ITA). A person who deals with an associated person must set and apply an arm's length price (s.140A(2)). The Director General of Inland Revenue (DGIR) may substitute the price (s.140A(3)) or disregard a structure that lacks economic substance (s.140A(3A)). Control means a 20% shareholding plus one of three dependence tests (s.140A(5A)). The detail is in the Income Tax (Transfer Pricing) Rules 2023 (P.U.(A) 165/2023), amended by the Rules of 27 August 2026 (P.U.(A) 300/2026, deemed to apply from year of assessment 2023), and the Malaysia Transfer Pricing Guidelines 2024 (MTPG 2024, 24 December 2024). Related rules: s.140B (director loans) and s.140C (limits on related party interest).
Documentation
#Anyone with a controlled transaction must prepare contemporaneous transfer pricing documentation (CTPD) before the due date of the tax return for that year (Rule 4(1)). Full CTPD is needed if gross business income is above RM30m and cross-border controlled transactions are RM10m or more a year, or if controlled financial assistance is above RM50m a year (MTPG 2024 para 1.7). Others may prepare a minimum CTPD (para 1.8). People with controlled transactions of RM1m or less in total, or only certain domestic ones, need no CTPD but must still follow the arm's length rule and keep records (paras 1.5 and 1.6). A permanent establishment always prepares its own full CTPD (para 1.4). The CTPD is not filed with the return; it must be handed over within 14 days of a written notice (Rule 5(3)), in Bahasa Malaysia or English. There is no separate master file or local file form: group information is part of the CTPD (Schedule 1), and a master file can replace it.
Methods
#The traditional transaction methods (CUP, resale price, cost plus), the transactional profit methods (TNMM, profit split), or another method the DGIR allows are accepted. The most appropriate method must be used and explained (Rule 6). Comparables must be from the same year, and other years may only help select them, not be averaged (Rule 7(6)). The arm's length range is the 37.5th to 62.5th percentile of the data set (Rule 13(5)). A price inside the range may be accepted, and a price outside it is taken to be the median (Rule 13(2)). The DGIR may adjust to the median or any point above it where comparability is weaker or defects cannot be fixed (Rule 13(3), MTPG 2024 para 2.12). The DGIR does not make downward adjustments (MTPG 2024 para 4.28), but since the 2026 amendment the other Malaysian party to the transaction may ask for an offsetting adjustment, which needs the Director General's approval (Rule 13(1A), P.U.(A) 300/2026). Database searches may be refreshed every three years, but financial data must be updated each year (MTPG 2024 para 11.5).
Penalties
#A surcharge of up to 5% of the adjustment applies to adjusted years that start on or after 1 January 2021 (s.140A(3C)), even if no extra tax is due. The IRBM says 5% is the general rate and 0% to 4% applies to a valid voluntary disclosure (Transfer Pricing Tax Audit Framework 2025). Failing to hand over CTPD within 14 days is an offence under s.113B: a fine of RM20,000 to RM100,000, or up to 6 months in prison, or both. If there is no prosecution, a penalty of RM20,000 to RM100,000 per year applies, set by days of delay (RM20,000 up to 7 days, RM100,000 over 28 days). For adjusted years starting before 1 January 2021, a s.113(2) penalty of 15%, 30% or 45% of the undercharged tax applies instead. Failing to keep records for 7 years is an offence under s.119A (RM300 to RM10,000).
Pillar Two
#Part XI of the ITA (ss.157 to 239, from the Finance (No. 2) Act 2023) applies a Multinational Top-up Tax (MTT, the income inclusion rule) and a Domestic Top-up Tax (DTT, the qualified domestic top-up tax) to financial years that begin on or after 1 January 2025. It covers groups with consolidated revenue of at least EUR 750m in at least two of the four preceding years. No undertaxed profits rule (UTPR) was found in the law or the IRBM guidelines. Every Malaysian constituent entity files a top-up tax return (TTR) on MyTax, even if no tax is due, and the GloBE Information Return (GIR) goes to the IRBM through HiDEF unless an exchange partner files it. Both are due 15 months after the group's year end (ss.201 and 202). The IRBM gives 18 months for the first year the group is in scope for Malaysia (30 June 2027 for a calendar 2025 year), but this comes from its guideline and FAQ, not the Act. The IRBM says the filing platforms are expected in early 2027 and that no separate Pillar Two registration is needed for the TTR.
Other rules
#Groups with consolidated revenue of at least RM3bn file a country-by-country report with the IRBM within 12 months of year end if the ultimate parent is resident in Malaysia, or a surrogate parent steps in (Income Tax (CbC Reporting) Rules 2016, Rules 2, 5 and 7). Each Malaysian entity must notify the IRBM in writing by the last day of the reported year (Rule 6), through Form C or a letter. A company's tax return is Form C, due 7 months after year end (s.77A) with a 1 month e-Filing grace period. Labuan entities have their own return and regulations. Advance pricing arrangements and the mutual agreement procedure are offered by the IRBM. The IRBM audits transfer pricing under its Transfer Pricing Tax Audit Framework 2025.
Filings and deadlines
#| # | Filing | When | Who | Source |
|---|---|---|---|---|
| 1 | CbC notification (written notice to the IRBM) On or before the last day of the reported financial year, the ultimate or surrogate parent says it is the reporting entity (Rule 6(1)), and every other Malaysian entity names the reporting entity and its tax residence (Rule 6(2)). Since year of assessment 2021 this can be done through Form C (or Form LE1 for Labuan), or by a letter that follows the IRBM template and is delivered by hand or courier to the IRBM. Failure is an offence under s.119B (fine RM20,000 to RM100,000, or up to 6 months in prison, or both). | Last day of the fiscal year (e.g. Dec 31, 2025) | Every Malaysian resident entity (and permanent establishment) of an MNE group whose total consolidated revenue in the financial year before the reported year was RM3bn or more (CbC Rules 2016, Rule 2). | IRBM Country-by-Country Reporting page and Income Tax (CbC Reporting) Rules 2016, Rule 6 |
| 2 | Full contemporaneous transfer pricing documentation (CTPD) The CTPD must exist, and be dated, before the due date of the Form C for the year (Rule 4(1)). That is the 7 month date, not the e-Filing grace date, so finish it earlier. It is not filed with the return. It holds group information (Schedule 1, which a master file can replace), local business information (Schedule 2), cost contribution arrangement information if any (Schedule 3), an index, the completion date and the pricing analysis (Rule 4(2)). Comparable searches may be refreshed every three years, with yearly updates of the financial data (MTPG 2024 para 11.5). The CTPD must be kept for 7 years (s.82, para 11.17). | 7 months after year end (e.g. Jul 31, 2026) | Full CTPD is required if gross business income is more than RM30m and cross-border controlled transactions total RM10m or more a year, or if controlled financial assistance given or received is more than RM50m a year (MTPG 2024 para 1.7). The tool tests only the RM30m income part, so check the other two tests yourself. A permanent establishment always prepares its own full CTPD (para 1.4). | Income Tax (Transfer Pricing) Rules 2023, rule 4, and MTPG 2024 paras 1.3 to 1.7 and 11.2 |
| 3 | Minimum contemporaneous transfer pricing documentation (minimum CTPD) It must be completed and dated before the due date of the Form C for the year (MTPG 2024 para 1.9, 11.12), which is the 7 month date. It has reduced content and may use any method that gives an arm's length result. Details are required only for key controlled transactions (those tied to the main business activity, or 20% or more of operating revenue), but all controlled transactions must be listed (paras 11.13 and 11.14). A comparability analysis is not needed up front but may be requested. | 7 months after year end (e.g. Jul 31, 2026) | A person with controlled transactions who is not exempt (para 1.5) and does not meet the full CTPD tests (para 1.7). The person may choose to prepare a full CTPD instead (para 1.8). Exempt: controlled transactions of RM1m or less in total, individuals not in business, and certain domestic only cases (para 1.5). | MTPG 2024 paras 1.5 to 1.10 and 11.12 to 11.15 (IRBM) |
| 4 | Corporate income tax return (Form C) Due within 7 months from the day after the accounting period ends (ITA s.77A(1)), which is the last day of the 7th month, for example 31 July 2026 for a 31 December 2025 year end. A return filed through e-Filing within one month after that date is treated as on time, and the same grace applies to paying the balance of tax (IRBM Return Form Filing Programme 2026, guide note 1). This is a grace period, not an extension, and the earlier date stays the legal due date, so it is shown as the standard date and the 8 month date appears when extended dates are on. A late return is an offence (fine RM200 to RM20,000 or up to 6 months in prison, s.112(1)) or, if there is no prosecution, a penalty of up to three times the tax (s.112(3)). The tool does not move dates that fall on a weekend or holiday, so a Sunday or holiday due date is shown as it is. | Extended: 1 month e-Filing grace period (IRBM Return Form Filing Programme) (e.g. Aug 31, 2026); original due date Jul 31, 2026 | Every company with a Malaysian tax return duty, including dormant companies. Labuan entities file a separate return of profits. | IRBM Return Form (RF) Filing Programme for 2026 (companies, e-C) and ITA s.77A |
| 5 | Pillar Two information in the Form C The IRBM says in-scope entities only need to disclose the relevant Pillar Two information in their domestic tax returns. In Form C this is items H9a and H9b (GMT status), so it follows the Form C due date. Answer 'yes' if the group is in scope even if no top-up tax is due. If the company's accounting period began in 2024 and the e-Filing form blocks these items, the IRBM asks for an email to tf2p@hasil.gov.my naming the ultimate parent and its jurisdiction (IRBM FAQ ver 9.0, GMT status reporting items 1 and 2). | With Corporate income tax return (Form C) (extended) (e.g. Aug 31, 2026); original due date Jul 31, 2026 | Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding financial years that have an entity located in Malaysia (a Malaysian parent for the MTT, any Malaysian constituent entity for the DTT). | IRBM FAQ on GMT ver 9.0 (11 August 2026), GMT status reporting in tax return, items 1 and 2 |
| 6 | Country-by-country report (CbCR) Filed no later than 12 months after the last day of the reported financial year (Rule 7), in XML through the HiDEF platform with the IRBM public key (for example 31 March 2019 for a year ending 31 March 2018, per the IRBM guideline). Figures are in Malaysian ringgit. A missing report is an offence under s.112A, and an incorrect or incomplete one under s.113A (each a fine of RM20,000 to RM100,000, or up to 6 months in prison, or both). Labuan entities follow the parallel Labuan CbC regulations (P.U.(A) 409/2017). | 12 months after year end (e.g. Dec 31, 2026) | The Malaysian resident ultimate parent of a group with consolidated revenue of RM3bn or more in the prior year. A Malaysian surrogate parent files if the foreign parent does not have to, if there is no qualifying exchange agreement, or after a systemic failure (CbC Rules 2016, Rule 5). | IRBM CbCR Guidelines (2019), paras 3.1 and 5.5, and CbC Rules 2016, Rule 7 |
| 7 | GloBE Information Return (GIR) Due 15 months after the last day of the group's reporting year (ITA s.201(1)), and 18 months for the first year the group is in scope for Malaysia, which is calendar 2025 for most groups (30 June 2027). The date follows the ultimate parent's year end, not the Malaysian entity's (IRBM FAQ 21). It goes through HiDEF in XML, with a MyGIR ID registration, and the IRBM says the platform is expected in early 2027. It is not needed from a Malaysian entity if the parent or a designated filing entity files it in a country with a qualifying exchange agreement. A group may name one Malaysian designated local entity to file for all. | 18 months after year end (first year) (e.g. Jun 30, 2027) | Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding financial years that have an entity located in Malaysia (a Malaysian parent for the MTT, any Malaysian constituent entity for the DTT). | IRBM Guideline on the Implementation of GMT in Malaysia (12 Sep 2025), paras 6.2 to 6.7, and IRBM GMT Filing Obligations page |
| 8 | Election notice for a designated filing or local entity A written notice in the prescribed form, due by the same date as the GIR: 15 months after the reporting year end, or 18 months for the first year in scope (ITA s.201(4), IRBM Guideline paras 6.3, 6.5 and 6.7). The IRBM says this notice is built into the top-up tax return. The date follows the ultimate parent's year end, like the GIR. | 18 months after year end (first year) (e.g. Jun 30, 2027) | Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding financial years that have an entity located in Malaysia (a Malaysian parent for the MTT, any Malaysian constituent entity for the DTT). Needed only if the group names a designated filing entity abroad or a designated local entity in Malaysia. | IRBM Guideline on the Implementation of GMT in Malaysia (12 Sep 2025), paras 6.3 to 6.7 |
| 9 | Top-up tax return (TTR, covers MTT and DTT) Due 15 months after the last day of the reporting year (ITA s.202(1)), and 18 months for the first year in scope for Malaysia (30 June 2027 for calendar 2025). The date is based on the ultimate parent's year end (IRBM FAQ 21). It is filed on MyTax as a separate return from Form C, with the amount in Malaysian ringgit, and the platform is expected in the first quarter of 2027. A late return is an offence (fine RM20,000 to RM100,000, or up to 6 months in prison, s.225). An amended return may be filed within 6 months after the due date, with a 10% increase on the extra tax (s.203). The IRBM gives penalty relief for years that begin on or before 31 December 2026 if reasonable measures were taken. | 18 months after year end (first year) (e.g. Jun 30, 2027) | Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding financial years that have an entity located in Malaysia (a Malaysian parent for the MTT, any Malaysian constituent entity for the DTT). Every constituent entity in Malaysia files, even if no top-up tax is due. | ITA ss.202 and 203, IRBM DTT Guideline para 10.2, and IRBM FAQ ver 9.0 items 1, 21 and 23 |
| 10 | Payment of top-up tax (MTT and DTT) Due on the last day of the 15th month after the reporting year (ITA s.220(8)), and the last day of the 18th month for the first year in scope (IRBM Guideline para 6.9, FAQ 17). The date follows the ultimate parent's year end. Unpaid tax is increased by 10% (s.220(4)), which the DGIR may remit for good cause (s.220(7)). | 18 months after year end (first year) (e.g. Jun 30, 2027) | Groups with consolidated revenue of at least EUR 750m in at least two of the four preceding financial years that have an entity located in Malaysia (a Malaysian parent for the MTT, any Malaysian constituent entity for the DTT). Only if top-up tax is payable. | ITA s.220 and IRBM Guideline para 6.9 |
| 11 | Hand over the CTPD on request The CTPD must be given within 14 days from the date the notice is served (Rule 5(3)). Failure is an offence under ITA s.113B(1): a fine of RM20,000 to RM100,000, or up to 6 months in prison, or both, for each year of assessment. If there is no prosecution, the DGIR may charge a penalty (s.113B(4)): RM20,000 if up to 7 days late, then RM40,000, RM60,000 and RM80,000 for each further 7 days, and RM100,000 if more than 28 days late. A CTPD that is on time but does not meet the Rules can draw the same penalty. A relief applies for accounting periods that began before 29 May 2023. | Within 14 days of a tax authority request | Anyone who entered into a controlled transaction and is served a written notice by the DGIR. | Transfer Pricing Tax Audit Framework 2025 (IRBM), section 10.2, and ITA s.113B |
| 12 | MyGIR ID registration for HiDEF The IRBM says a MyGIR ID is needed to reach HiDEF and that details will come later. No date has been published, and the platform is expected in early 2027. The top-up tax return needs no registration: the entity uses its existing tax identification number. | See note | Entities or groups that file the GIR with the IRBM themselves. | IRBM GMT Filing Obligations page |
Official texts
#- Income Tax Act 1967 (Act 53), English text as at 21 May 2024 (IRBM copy of the LOM reprint) (Not protected by copyright: section 3 of the Copyright Act 1987 says 'literary work' does not include official texts of the Government or statutory bodies of a legislative or regulatory nature. The AGC portal carries an all-rights-reserved notice for the website but gives no reuse licence for the laws.)
- Income Tax (Transfer Pricing) Rules 2023 (P.U.(A) 165/2023) and Income Tax (Transfer Pricing) (Amendment) Rules 2026 (P.U.(A) 300/2026) (Subsidiary legislation published in the Federal Government Gazette is an official regulatory text, so it falls outside 'literary work' in section 3 of the Copyright Act 1987.)