Transfer Pricing is one of the most challenging tax issues and a key influence on a company’s worldwide tax burden. It impacts every aspect of the supply chain – R&D, procurement, manufacturing, marketing, distribution and customer support.
A multinational’s ability to maintain low effective tax rates, domestically or across multiple jurisdictions can impact its market valuation. The way the Transfer Price is imbibed in a transaction can be critical in determining the success of a business venture.
As more and more countries embrace the concept of Transfer Pricing, regulations, new rules, documentation standards and penalties are being legislated to enforce and administer the regulations. This impacts tax optimisation, compliance and reporting obligations of multinationals and Malaysian corporations.