Tag Archives: Guidelines

United Nations Practical Manual on Transfer Pricing for Developing Countries (2017)


The United Nation Practical Manual on Transfer Pricing for Developing Countries was launched and distributed in digital format on 7th April 2017. The TP Manual provides a great assistance to the developing countries to counter and mitigate the risks of profit shifting.

The updated version adopted a new format. The manual is divided into four (4) parts for better clarity and understanding:

  • Part A: This section related to the Transfer Pricing in a global environment
  • Part B: The guidance on design principles and policy considerations
  • Part C: The practical implementation of a transfer pricing regime in developing countries; and
  • Part D: Country practices. This section includes other statements updated and presented by Brazil, India, China and South Africa.

Apart from its presentations and changes to the manual, the 2nd edition of the UN Transfer Practical Manual on Transfer Pricing also includes some new chapters on intra-group services, cost contribution arrangements, the treatment of intangibles, significant updates of other chapters, etc.

In short, this is a timely and essential update provided by the United Nations for the developing countries whom wishes to adopt, implement or further improve the transfer pricing regulations.



Malaysian Transfer Pricing Guidelines 2012

The Malaysian Transfer Pricing Guidelines 2012 mainly governs the standard of transfer pricing which is supported by the rationale of arm’s length principle as set out under the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines.

Despite some of the main criteria under the Malaysian Transfer Pricing Guidelines 2012 were adopted from the OECD Transfer Pricing Guidelines, however there may be some areas that also adheres to the Income Tax Act 1967 and the Malaysian Inland Revenue Board of Malaysia procedures.

The guidelines however may be reviewed occasionally for further improvisation.

The following is an overview of the Malaysian Transfer Pricing Guidelines 2012 contents:

Part I – Preliminary

  • Introduction
  • Objective
  • Scope
  • Relevant Provisions

Part II – The Arm’s Length Principle

  • Meaning of Arm’s Length Principle
  • Determination of Arm’s Length Principle
  • Comparability Analysis
  • Factors Determining Comparability
  • Comparability Adjustments

Part III – Comparability Analysis

  • Comparable Period
  • Multiple Year Data
  • Arm’s Length Range
  • Separate and Combined Transactions
  • Re-characterization of Transactions
  • Transfer Pricing Adjustment
  • Losses

Part V – Business Restructuring

  • Business Restructuring

Part VI – Specific Transactions

  • Intragroup Services
  • Cost Contribution Arrangement
  • Intangible Properties
  • Intragroup Financing

Part VII – Documentation

  • Retention of records
  • Transfer Pricing Documentation
  • Penalty

Appendix A: Documentation on specific transactions

Appendix B : Comparability Analysis


Source: LHDN – Transfer Pricing Guidelines 2012

OECD Transfer Pricing Guidelines for Multinational Enterprises & Tax Administrations

The origin of the OECD dated to 1960’s, where 18 countries joined their forces together in creating an organisation that is dedicated to the economic development.  Presently, the members of the OECD spanning across the global have worked closely to build a stronger foundation.

The OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations were published in July, 2010. The guidelines provides detailed guidance on transfer pricing, application of the arm’s length principle, transfer pricing methods, comparability analysis, transfer pricing documentation and more.

The OECD Guidelines are considered to be an international soft law for the OECD members. The guidelines were published to bring all of the OECD members together to achieve one collective goal. Each of the OECD member may choose to incorporate the guidelines into its national law.

The following is an overview of the OECD Guidelines table of contents:

Chapter 1: The Arm’s Length Principle

Chapter 2: Transfer Pricing Methods

Chapter 3: Comparability Analysis

Chapter 4: Administrative Approaches to Avoiding and Resolving Transfer Pricing Disputes

Chapter 5: Documentation

Chapter 6: Special Consideration for Intangible Property

Chapter 7: Special Consideration for Intra-Group Services

Chapter 8: Cost Contribution Arrangements

Chapter 9: Transfer Pricing Aspects of Business Restructurings

Seven List of Annexes

Appendix: Recommendation of the Council on the determination of transfer pricing between associated enterprises

On 14th of December 1960, approximately 20 countries originally signed the Convention on the Organisation for Economic Co-operation and Development. Since then, 15 more countries have become members of the Organisation.

The list of the current members countries of the Organisation and dates on which they deposited their instruments of ratification.




7 June 1971


29 September 1961

13 September 1961


10 April 1961


7 May 2010

Czech Republic

21 December 1995


30 May 1961


9 December 2010


28 January 1969


7 August 1961


27 September 1961


27 September 1961


7 May 1996


5 June 1961


17 August 1961


7 September 2010


29 March 1962


28 April 1964


12 December 1996


1 July 2016


7 December 1961


18 May 1994


13 November 1961

New Zealand

29 May 1973


4 July 1961


22 November 1996


4 August 1961

Slovak Republic

14 December 2000


21 July 2010


3 August 1961


28 September 1961


28 September 1961


2 August 1961

United Kingdom

2 May 1961

United States

12 April 1961