Additional disclosure in relation to related party transactions in Annual Tax Return (Form C)

The MIRB has released an updated sample for Form C for year of assessment (YA) 2022. Starting from YA 2022, companies that have related party transactions are required to disclose more information in relation to their controlled transactions.

Additional disclosures

These are the 8 additional disclosures required in the Form C:

Entity activities & characterization;
Business restructuring during the basis period;
Research & development activity;
Ownership of trade/brand name/ intellectual property;
Involvement in cash pool activity;
Any dividend declared during the year;
Whether the taxpayer is a Permanent Establishment (“PE”); and
Involvement in Cost Contribution Arrangement (“CCA”).

Taxpayers are reminded to make the relevant disclosures to avoid any incorrect annual tax returns made that could be subject to 200 percent penalty of undercharged tax. Companies that fail to prepare the transfer pricing documentation will incur a penalty ranging between RM20,000 to RM 100,000; and failure to submit transfer pricing documentation within 14 days from date of request by the MIRB will be subject to 5 percent penalty on the transfer pricing adjustment.

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