From 11–22 August, LHDN is auditing 103 corporations in a nationwide crackdown on aggressive tax planning. The message is clear: “Check your compliance before LHDN checks you.” (The Star, 11 Aug 2025)

Most SMEs think TP is only for big MNCs. Not true.

Even local transactions between related companies on management fees, loans, or rental fall under TP rules. Yet many SMEs still ignore the need for documentation.

Why?

Some don’t know it applies to them. Others think it’s too expensive.
And many delay because there’s no need to submit TP documents unless LHDN asks.

But once audited, you only have 14 days to respond. Penalties range from RM20,000 to RM100,000 for not having documentation on time.

Full TP docs are required if your turnover is RM30 million and cross-border deals exceed RM10 million. But even smaller SMEs need simplified docs if transactions exceed RM1 million.

Don’t wait for the audit letter.

At KTP, we help SMEs get audit-ready and avoid costly mistakes.

Read the full content in our blog
https://www.ktp.com.my/blog/transfer-pricing-sme-exemption/14aug2025