The Base Erosion and Profit Shifting (BEPS) Action Plan recognised that enhancing transparency for tax administrations by providing them with adequate information to assess high-level transfer pricing and other BEPS-related risks is a crucial aspect for tackling the BEPS issues. Action Plan 13 provides a template for multinational company to report annually and for each tax jurisdiction in which they do business the information set out therein. This report is called the Country-by-Country Reporting (CbCR).
CbCR has been introduced in the Final Report on BEPS Action 13 published by the Organisation for Economic Co-operation and Development (OECD) in October 2015, as part of the three-tiered approach to transfer pricing documentation. The three-tiered standardised approach to transfer pricing documentations are represented by Master File, Local File and CbCR. The purpose is to enhance the transparency for tax administration, taking into consideration the compliance costs for businesses.
Reporting of CbCR information will be in accordance to the OECD's CbCR Extensible Marrkup Language (XML) Schema
Submission of the CbCR Reporting is through the IRBM's IT platform. Information on this IT platform will constantly be updated.
Parent Surrogate Filing/Voluntary Filing
Parent Surrogate/Voluntary Filing for Financial Year 2016 is available for Malaysia's Ultimate Holding Entity
For the submission of Notification Letter or any queries pertaining to CbCR, kindly contact us at :
Department of International Taxation
Telephone: (+603) 8313 8888
The Malaysian Income Tax (Country-by-Country Reporting) Rules 2016 (The Rules) P.U.(A) 357/2016 has been gazetted on 23 December 2016. The Rules applies to Multinational headquartered in Malaysia, having total group revenue of more than RM3 billion in the year 2016 in which they are required to furnish their aggregate tax jurisdiction-wide information relating to the global allocation of the income, taxes paid and certain indicators of the location of economic activity among tax jurisdictions in which the multinational company group operates. The information to be furnished is pertaining to the financial information of 2017 onwards.
The Ultimate Holding entity of the multinational company group headquartered here is responsible to prepare and file the CbCR to IRBM within one year from the end of their financial year.
Malaysian taxpayer who is part of the multinational company group that is subject to prepare CbCR in another country, will need to notify us of their reporting entity and its residency, before the end of their financial year.
Samples of Notification Letter
The information that needs to be reported must be based on the template attached includes three tables. The tables contain information on the global activities and financial characteristics of the group;
Table 1 sets out the global allocation by tax jurisdiction of a multinational companies group third party revenues, related party revenues, profit before tax, tax paid, tax accrued, stated capital, accumulated earnings, number of employees and tangible assets.
Table 2 lists all constituent entities of the multinational company group by tax jurisdiction, together with their main business activities.
Table 3 allows for the provision of additional information by the multinational company group in the form of free text to facilitate the understanding of the information contained in Table 1 and Table 2.
General Instructions concerning the definition of key terms used in the template and Specific Instructions for completion of Table 1 and Table 2 should also be read together with the subsequent interpretative guidance provided by the OECD;