Malaysia, in principal, has committed to implement and adhere to Base Erosion and Profit Shifting (BEPS) Action Plan. It has officially joined the OECD Inclusive Framework on BEPS as Associate Members. The framework emphasises on four minimum standards:
• Action 5 – Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance
• Action 6 – Preventing the Granting of Treaty Benefits in Inappropriate Circumstances
• Action 13 – Guidance on Transfer Pricing Documentation and Country-by-Country Reporting
• Action 14 – Making Dispute Resolution Mechanisms More Effective
In addition, the Forum on Harmful Tax Practices (FHTP) has identified certain Malaysian incentives for evaluation on the basis that it provide preferential regimes for mobile geographical services activities related to intellectual property and non-intellectual property. The incentives are as follows:
|
Intellectual property incentives |
Non-intellectual property incentives |
|
Principal Hub |
Biotechnology Industry (BioNexus) |
The Ministry of Finance (MoF) has released timelines where the above mentioned tax incentives shall be amended to meet the FHTP criteria. The Ministry of Finance is working with the Inland Revenue Board and related ministries/agencies to review the incentives in order to meet the criteria set under the FHTP.
Kindly visit the MoF website for further information.
Source: MoF website, 12 June 2018