With the rapid development and modernization globally, many businesses have gone international with a simple click of button on the computer. In this respect, the transactions are made over the broadband of the internet to every corner of the globe.
Due to such development, companies are facing more and more invoice for expenses from around the world, which can be claimed for tax deduction. However, in the position of IRB, it may be a losing end and will reduce the income of the country. Hence, IRB has developed a set of law that cover the international transactions, especially on purchasing the importing services, as there is no acknowledgement or counter check by Royal Malaysian Customs of Malaysia.
At the same time, the rapid development of the industry of the nation also result in more and more companies set up in the country. This has resulted more than 3 companies a director can hold and the inter-company transactions have become increasingly heavy and complicated. Therefore, IRB has set a transfer pricing rule to govern the happening of such events.