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The Malaysian Finance Act 2020 introduced, among others, several legislative changes to the Malaysian Income Tax Act 1967 (ITA) in respect of transfer pricing. Notably, a penalty provision was introduced. Effective 1 January 2021, taxpayers (where applicable) who fail to furnish transfer pricing documentation (TPD) upon the Malaysian Inland Revenue Board’s (MIRB’s) request will be subject to a fine ranging from RM 20,000 to RM 100,000 and / or imprisonment.

Consistent with this, the MIRB has also revised the Transfer Pricing Guidelines 2012 to reduce the time given to taxpayers to furnish their TPD from 30 days to 14 days.

On 28 January 2021, the Commission amended the Temporary Framework for COVID-19 (“Framework”) again. This 5th Amendment prolongs its application until 31 December 2021. Other changes include increasing aid amounts that the Commission will approve under the Framework and allowing for limited amounts of repayable Framework aid to be converted to grants.

The EU has urged member countries to grant more legal powers to the EU in pursuit of a ‘Health Union’, which would enable the EU to better manage future crises. This announcement comes in the wake of the COVID-19 pandemic, which exposed areas of weakness and gaps in the EU’s health powers. Critics argue that the pandemic has seen a lack of effective measures to monitor medicines shortages, that the EU Infectious Diseases Agency’s advice lacked effectiveness, and that there was a disjointed approach to the virus across EU member states. In response, the Commission expressed desire to make the following changes:

create an EU-wide pandemic preparedness plan
align testing methods with EU labs
give the European Medicines Agency (EMA) more power to mitigate drug shortages

The topic of taxpayer’s rights in the age of tax transparency is discussed in a pending case before the ECJ. The ECJ has earlier ruled in favour of the taxpayer on the application of the right to a fair trial on a cross-border exchange of information upon request from a tax authority in another EU Member State, and will now address right of effective legal remedy directly against an information request under the same exchange procedure.

On 30 September 2020, the European Commission published Explanatory Notes on the new VAT e-commerce rules that apply from 1 July 2021, which change how VAT applies to imports and distance sales of goods in the EU. These extensive Explanatory Notes explain and clarify the upcoming VAT rules and provide practical guidance for electronic interfaces (e.g. marketplaces or platforms), suppliers and logistic service providers involved in e-commerce. 

Due to COVID-19, the implementation of the VAT e-commerce rules was postponed by six months from 1 January 2021 to 1 July 2021; however, the European Commission recently indicated that further postponement will not occur. Businesses must now urgently prepare for the new rules. The Explanatory Notes offer some useful guidance for this exercise. Although they are not legally binding, it is our experience that all EU member states adhere to the views set out in such notes. After all, representatives of all EU member states were involved in drafting them.  

The European Commission has launched a public consultation seeking views on sustainable corporate governance. Responses to the consultation will help shape the European Commission’s legislative proposals next year regarding mandatory human rights and environmental supply chain due diligence requirements and enhanced directors’ duties and sustainable corporate governance.

On 25 May 2018, the Council of the European Union (EU) adopted a directive on the mandatory disclosure and exchange of cross-border tax arrangements. This is the sixth update of the Directive on Administrative Cooperation, therefore referred to as ‘DAC6’ and the disclosure regime is now live. Under the new…