Transfer pricing concerns the prices set for transactions between associated persons. HASiL's transfer pricing guidance describes it as intragroup pricing arrangements for the acquisition or supply of property or services between associated persons, including financial assistance within a group. It applies the arm's length principle: the price should be consistent with what independent persons would agree.
The current rules
HASiL explains that section 140A of the Income Tax Act 1967 provides the specific legal basis for the arm's length principle in controlled transactions. Read the Income Tax (Transfer Pricing) Rules 2023 together with the Income Tax (Transfer Pricing) (Amendment) Rules 2026, P.U. (A) 300/2026, gazetted on 27 August 2026 and deemed effective from YA 2023. Together, they set requirements for contemporaneous transfer pricing documentation, and the Malaysian Transfer Pricing Guidelines 2024 provide guidance for preparing that documentation from the year of assessment 2023. HASiL's Transfer Pricing Tax Audit Framework, effective 31 July 2025, states that the 2012 rules apply up to the year of assessment 2022 and the 2023 rules from the year of assessment 2023.
For group lending, see HASiL’s guidelines index for its 2026 guidance on controlled financial transactions and intra-group loans. HASiL states that the guidance applies to arrangements entered into on or after 31 July 2026; it also provides guidance for taxpayers that have not charged interest on intra-group loans.
Preparation and submission deadlines
Where contemporaneous transfer pricing documentation is required, prepare it before the relevant tax return filing deadline. Under rule 5(3), furnish it in writing within 14 days of service of the Director General’s notice. Failure to comply can lead to prosecution or penalties under section 113B of the Income Tax Act 1967. Which transactions are covered, and what level of documentation applies, depends on the company's circumstances and on the rules and guidelines themselves.
Related-party arrangements also raise accounting and company-law questions; see our article on related party transactions in a private company.
This article is general information only. Requirements depend on each company's circumstances; please refer to HASiL's official guidance, and see Saifudin & Co's tax advisory and compliance services if you would like assistance.