TRANSFER pricing has been at the forefront of international news where more governments including Malaysia are scrutinising multinational companies aggressively in order to combat profit shifting using intercompany transactions and to collect a “fair share” of taxes. With the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Action Plan and the introduction and extension of transfer pricing regulations by the Malaysian tax authority, this has heightened the focus on transfer pricing among taxpayers in Malaysia. Hence, there is a high growth potential and demand in the field of transfer pricing.
Place of opportunity
Transfer pricing specialists are needed in both consulting firms and multinational companies with their own in-house transfer pricing team in the private sector. The big four accounting firms are perhaps the single largest market employing transfer pricing specialists. Many may also find transfer pricing career opportunities with medium-sized accounting firms, economic consulting firms, boutique tax/transfer pricing firms and law firms.
Besides consulting firms, transfer pricing specialists may explore careers within the private industry with an in-house transfer pricing team. Most of the time, the private industry requires transfer pricing specialists with practical experience to apply their technical knowledge and skills in the business.
Type of work
A transfer pricing consultant provides value to their clients in three distinct ways: (1) ensuring compliance with transfer pricing guidelines, (2) providing guidance in planning and optimising transfer pricing policies, and (3) assisting with dispute resolution.
Companies having related party transactions in Malaysia are required to prepare transfer pricing documentation on an annual basis. In preparing this, a transfer pricing consultant conducts functional analysis interviews with clients to find out about the functions performed, assets employed, and the risks assumed by the business to characterise the entities. This is to provide guidance on appropriate transfer pricing policies or produce documentation that is compliant with the requirements. As the client base in a consulting firm normally comprises a wide range of industries such as automotive, consumer products, oil and gas, shipping, financial services, healthcare and many more, a transfer pricing consultant gets the opportunity to learn about how multinational companies operate, and catch a “behind the scenes” glimpse of operations, commercial and other key departments.
Companies often engage transfer pricing consultants when there are changes to their business such as business restructuring, alteration in supply chains and acquisition. Transfer pricing consultants assist the client by preparing relevant analyses and providing advice in the midst of these changes to ensure a positive outcome. They are also especially valuable in the event that tax authorities audit or evaluate a company’s tax policies and documentation. The transfer pricing consultants advise and represent the client to defend them when their positions are being challenged by the tax authorities during the audit and appeal process.
In-house roles for a transfer pricing specialist could involve transfer pricing policy work including monitoring transfer pricing rules, proactively managing transfer pricing risks, and keeping an eye towards the future; or transfer pricing implementation work such as transfer pricing calculations and reporting management. The type of work is usually more practical, focusing on risk management and policy implementation. It may also be much narrower by industry as the only “client” is the company you work for. However, the role would typically allow the transfer pricing specialist to come into contact with those outside the tax sphere much more often when working in-house.
Transfer pricing offers greater mobility than other fields in the tax profession as the rules and approach are similar across all jurisdictions. On the other hand, corporate tax jobs tend to require domestic tax knowledge. Many transfer pricing teams in Malaysia are made up of professionals from different countries and backgrounds. If you aspire to work in a foreign country, transfer pricing would be a good gateway.
Undergraduates possessing a degree in finance, accounting, law, economics, or relevant professional qualifications are usually targeted to be hired as transfer pricing associates in Malaysian consultancy firms.
This article was contributed by Mabel Tan Chih Chean, Young Malaysian Institute of Certified Public Accountants (MICPA) task force member & transfer pricing assistant manager in Deloitte Malaysia. The views reflected in this article are those of the author and do not necessarily reflect the views of MICPA.