Malaysia Updates Mutual Agreement Procedure Guidelines

Malaysia’s Inland Revenue Board (IRB) on January 11, 2018, released guidelines on applying for the resolution of double tax cases through the Mutual Agreement Procedure.

The MAP Guidelines have been updated to incorporate the recommendations of the OECD BEPS Action 14 report on making dispute resolution mechanisms more effective.

The MAP is intended to enable territories to agree on how to interpret a bilateral tax treaty when such is disputed or there is an unintended tax outcome.

The tax agency pointed out that the MAP article in Malaysia’s tax treaties enables also the conclusion of both bilateral advance pricing agreements (APAs) and multilateral advance pricing agreements, to provide certainty to groups on acceptable arm’s length prices for related party transactions. For APAs, taxpayers should also consult the Advance Pricing Agreement Guidelines, the IRB said.