Treasure Advisory Sdn Bhd

Most Malaysian SMEs assume transfer pricing doesn’t apply to them—until an IRBM audit proves otherwise.

From informal pricing decisions to undocumented intra-group services, these small oversights can snowball into hefty penalties, adjustments, and months of scrutiny.

If your SME has any cross-border related-party transactions, TP isn’t optional—it’s a compliance mandate.

Curious why so many SMEs overlook it and what the hidden risks really are?
Read the full breakdown on the Treasure Advisory blog: Why Malaysian SMEs Ignore Transfer Pricing—Until It’s Too Late

👉 Link to the post https://tinyurl.com/why-sme-ignore-tp

Why Malaysian SMEs Ignore Transfer Pricing—Until It’s Too Late Transfer pricing compliance isn't just for MNCs. Malaysian SMEs face LHDN audits, penalties, and tax adjustments for non-compliance. Learn why documentation matters, common mistakes, and how to

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Many Malaysian businesses pay for intra-group shared service but not all of them qualify as deductible expenses in the eyes of the IRBM.

💡So what’s the difference?
Only services that have real commercial value and economic substance are chargeable. These are services that genuinely support business operations and meet both the benefit test and the independent party willing to pay test include IT support, HR functions, logistics coordination, centralised marketing and other operational support services.

Companies often fail to recognise that there are some services not chargeable such as shareholder activities, passive association, duplicate activities and on call services.
These are costs typically incurred for the benefit of the parent company or group management rather the and the subsidiaries. If these charges are billed to your subsidiaries, IRBM may disallow the deduction during tax audit.

This distinction is one of the most common reasons for transfer pricing adjustments in Malaysia.

Explore our services, workshops, and blogs on Transfer Pricing. Visit us at treasureadvisory.com.

Family-owned businesses are the backbone of Malaysia’s economy—but they’re also among the most vulnerable when it comes to transfer pricing (TP) pitfalls.

Here are 3 costly mistakes many make without realising:

1️⃣ Treating related-party transactions (RPT) casually
Handshake deals, verbal agreements, and “family understanding” don’t work with the IRBM. Every RPT needs clear pricing logic and documentation.

2️⃣ Undercharging or overcharging group entities
Favouring one entity over another—often to “help with cash flow”—leads to non–arm’s length pricing. This is one of the quickest ways to trigger TP scrutiny.

3️⃣ Ignoring TP documentation because they’re ‘not an MNC’
If you have related party transactions, irrespective local or cross-border transactions, you MUST comply with arm's length principle. Family-owned doesn’t mean exempt, and penalties can be steep.

💡 A strong TP policy protects your business, your family legacy, and your tax position.

For expert guidance, more on transfer pricing, and TP documentation support, visit Treasure Advisory.

📢 IRBM’s Latest Audit Focus: Stay Compliant and Protect Your Business

The Inland Revenue Board of Malaysia (IRBM) has intensified its focus on transfer pricing and controlled transactions, making compliance more important than ever. From stricter audit protocols to penalties and surcharges, Malaysian businesses need to understand the Transfer Pricing Tax Audit Framework 2025, documentation requirements, and voluntary disclosure options under the Income Tax Act 1967 and Transfer Pricing Guidelines 2023 📄.

Our latest blog breaks down what your company needs to know to stay audit-ready, minimize risk, and maintain compliance.

For expert guidance and practical support on transfer pricing compliance, documentation, and audit defense, trust Treasure Advisory
— helping Malaysian businesses navigate complex tax regulations with confidence.

🔗 Read the full article here:https://tinyurl.com/tp-audit-focus