Who Should Prepare Full, Minimum or Exempt Transfer Pricing Documentation?
The Malaysian rules in three buckets — with a slider tool to find yours.
Every Malaysian company with related-party dealings faces one question: which transfer pricing documentation must it prepare — full, minimum, or none at all? The answer turns on a handful of transfer pricing documentation thresholds set by the Malaysia Transfer Pricing Guidelines 2024. Here is the rule, in plain terms, plus a calculator to place your company.
Source: Malaysia Transfer Pricing Guidelines 2024 (LHDN) — paras 1.5, 1.7, 1.9 · Income Tax (Transfer Pricing) Rules 2023 [P.U.(A) 165/2023] · Section 140A, Income Tax Act 1967 · effective YA 2023.
Which transfer pricing documentation does your company need?
Every company with controlled (related-party) transactions falls into exactly one of three buckets. Work through them in order.
Exempt
Meets a limb of the exemption test (para 1.5). No documentation to prepare — but arm’s length and Form C disclosure still apply.
Minimum
Not exempt, and below the full-documentation thresholds (para 1.7). The default for most SMEs with related-party dealings.
Full
Crosses either full-documentation threshold in para 1.7 (large business with cross-border dealings, or large financial assistance).
Exempt first, then full, then minimum. If you escape the exemption test you must document; if you also cross a para 1.7 threshold you prepare the full version; otherwise the minimum version.
Try it: find your transfer pricing documentation bucket
Drag each slider. The result updates live to show Exempt, Minimum or Full — and why. A Full Type 1 trigger needs both GBI > RM30m and cross-border ≥ RM10m; Type 2 is financial assistance > RM50m on its own.
Domestic-exemption conditions — only apply when cross-border = 0 (solely domestic)
Minimum
Step 1 — Are you exempt? Para 1.5, MTPG 2024
Meet any one limb and you need not prepare documentation. Run them in order (a) to (d).
Fail all four limbs → documentation is mandatory; go to Step 2.
An exempt company must still price at arm’s length, still disclose the controlled transactions in Form C (marked “Exempted”), and still produce supporting documents within 14 days if HASiL asks. The exemption removes the documentation, not the arm’s length duty.
Step 2 — Do you cross a full-documentation threshold? Para 1.7, MTPG 2024
Two independent tests. Cross either one and you prepare full documentation (contents follow Rule 4(2), TP Rules 2023, and Chapter 11).
| Test | Trigger | Scope of the amount |
|---|---|---|
| Type 1 | Gross business income > RM30m and cross-border controlled transactions ≥ RM10m | Cross-border only; domestic excluded. Aggregate of goods, tangible assets, intangibles, intragroup services & CCA. |
| Type 2 | Controlled financial assistance > RM50m | Domestic + cross-border both count; gross income irrelevant; tested standalone. |
If Type 1 is triggered, full documentation applies to all controlled transactions — including financial assistance below RM50 million. The two tests are entry points, not silos. Thresholds run on gross value and actual flow; accounting net-offs are ignored, and the test is annual.
Step 3 — Otherwise: minimum documentation Para 1.9 & 11.12–11.15
A company that is not exempt (failed Step 1) but does not cross either para 1.7 threshold (Step 2) prepares a minimum transfer pricing documentation — reduced content, completed and dated before the return is filed. This is the default for the large middle group: real related-party dealings above RM1 million, but below the RM30m/RM10m and RM50m lines.
Worked examples
| Facts | Test result | Bucket |
|---|---|---|
| GBI RM40m; cross-border sales RM12m; financial assistance RM18m | Type 1 met (GBI >RM30m & CB ≥RM10m) | Full covers the FA too |
| GBI RM5m; cross-border services RM1.1m; total controlled > RM1m | Not exempt; no full threshold met | Minimum |
| Purely domestic; both parties at 24%; no incentives; no prior losses | Exemption limb (d) satisfied | Exempt |
| Only financial assistance, RM60m provided to a subsidiary | Type 2 met (FA >RM50m) | Full |
Full vs minimum: what actually differs
Same question, different depth. Minimum covers only key controlled transactions; full adds the analytical layers.
| Content | Full | Minimum |
|---|---|---|
| Organisational structure (worldwide/ownership, management, local chart) | ✓ | ✓ |
| Controlled transactions — description & terms | ✓ | ✓ (key only) |
| Pricing policy — formula, who sets it, review frequency, samples | ✓ | ✓ (key only) |
| Nature of the business — industry & market analysis | ✓ | — |
| Comparability & FAR (function/asset/risk) analysis | ✓ | — |
| TP methodology — selection & application | ✓ | — |
| Financial information | ✓ | — |
A “key” controlled transaction is one related to the principal business activity, or one that is 20% or more of total operating revenue.
Frequently Asked Questions
Who must prepare full transfer pricing documentation in Malaysia?
When is only minimum transfer pricing documentation required?
Who is exempt from preparing transfer pricing documentation in Malaysia?
Does an exempt company still have transfer pricing obligations?
Are the transfer pricing thresholds tested on gross or net amounts?
Not Sure Which Bucket You’re In?
Our Minimum Transfer Pricing seminar shows finance and tax teams how to read the thresholds, prepare the right level of documentation, and defend it to HASiL within the 14-day window.
See Upcoming Seminars →This tool is general information, not legal or tax advice. Thresholds and rules are summarised from the Malaysia Transfer Pricing Guidelines 2024, the Income Tax (Transfer Pricing) Rules 2023 [P.U.(A) 165/2023] and Section 140A of the Income Tax Act 1967. Confirm your own position with a licensed tax agent before acting.
