Quick answer: LHDN's flowchart for Year of Assessment 2023 onwards requires full contemporaneous transfer pricing documentation where gross business income exceeds RM30 million and cross-border controlled transactions are RM10 million or more a year, or where controlled financial assistance given or received exceeds RM50 million a year. Persons with total controlled transactions of RM1 million or less are exempt, and other taxpayers may choose to prepare a full or minimum document.
- Full documentation: gross income above RM30 million with cross-border controlled transactions of RM10 million or more.
- Also required: controlled financial assistance above RM50 million a year.
- Exempt: total controlled transactions of RM1 million or less.
- Permanent establishments with controlled transactions are covered regardless of threshold.
- Others may choose full or minimum documentation.
Thresholds for Full Documentation
| Test | Threshold |
|---|---|
| Gross business income with cross-border controlled transactions | Gross business income above RM30 million, and cross-border controlled transactions of RM10 million or more annually |
| Controlled financial assistance | Given or received above RM50 million annually |
Who Is Covered and Who Is Exempt
| Group | Position |
|---|---|
| Persons with controlled transactions under section 140A | Covered |
| Permanent establishments with controlled transactions | Must prepare, regardless of threshold |
| Others below the thresholds | May choose a full or minimum document |
| Individuals not carrying on a business | Exempt |
| Sole proprietors or partnerships with only domestic controlled transactions | Exempt |
| Total controlled transactions of RM1 million or less, domestic and cross-border | Exempt |
Domestic-Only Dealings
LHDN's flowchart also exempts persons with only domestic controlled transactions where both parties have no tax incentives, are taxed at the same headline tax rate, or have not made losses for two consecutive years before the transactions.
What the Source Does Not State
The flowchart reviewed does not state the deadline to furnish the documentation or the penalties for failing to prepare it. See LHDN's Malaysia Transfer Pricing Guidelines 2024 and its FAQs for those, and confirm the position before you rely on this page for a filing decision.
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Mistakes
Assuming small companies are exempt
The exemption is for total controlled transactions of RM1 million or less, and permanent establishments are covered regardless.
Ignoring domestic related-party dealings
Domestic controlled transactions count toward the RM1 million test.
Waiting for an audit
Prepare documentation when the transactions happen.
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Frequently Asked Questions
Quick answers.
Who must prepare transfer pricing documentation?
Persons with controlled transactions under section 140A who meet the thresholds, and permanent establishments with controlled transactions.
What is the gross income threshold?
Gross business income above RM30 million, with cross-border controlled transactions of RM10 million or more annually.
What is the financial assistance threshold?
Controlled financial assistance given or received above RM50 million annually.
Who is exempt?
Individuals not carrying on a business, domestic-only sole proprietors and partnerships, and persons with total controlled transactions of RM1 million or less.
Do permanent establishments need documentation?
Yes, regardless of threshold, if they have controlled transactions.
Can smaller taxpayers prepare documentation?
Yes. They may choose a full or minimum document.
What are controlled transactions?
Transactions with related parties under section 140A of the Income Tax Act.
Do domestic transactions count?
Yes, for the RM1 million total. Some domestic-only dealings are exempt under the flowchart's conditions.
From which year does this apply?
LHDN's flowchart applies from Year of Assessment 2023 onwards.
What is the filing deadline?
The flowchart reviewed does not state it. Check LHDN's guidelines.
What are the penalties?
The flowchart reviewed does not state them.
Can you help with transfer pricing documents?
Yes. We can help you check the thresholds and prepare the records.
Sources
Official sources
This page is general information, not legal advice. Agencies change their requirements, so confirm the current rules with LHDN, the Royal Malaysian Customs Department and SSM, or with us, before you act. Checked November 2026.
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