On January 11, 2018, the Inland Revenue Board of Malaysia released detailed taxpayer guidance on the mutual agreement procedure (MAP) framework contained in tax treaties.
The guidance states that a Malaysian resident or national may request MAP assistance in situations where Malaysia’s or its treaty partner’s actions result or will result in taxation not in accordance with the provisions of a tax treaty.
Examples of taxation not in accordance with a tax treaty that may warrant MAP assistance include issues relating to determination of permanent establishment, tax residence conflicts, transfer pricing adjustments, characterization or classification of income, and withholding tax liability.
The guidance discusses the time limit for requesting access to MAP, details about pre-filing meeting, procedure for submitting a formal request, the role and responsibilities of the taxpayer in the MAP process, and situations in which the MAP process could be terminated.
The guidance notes that a taxpayer can withdraw the MAP request at any time before the agreement is reached.