Dynamic magnetic properties of magnetoelectric TmAl 3 (BO 3 ) 4 borate have been investigated by terahertz spectroscopy. Crystal field (CF) transitions within the ground multiplet 3 H 6 of Tm 3+ ions are observed and they are identified as magnetic-dipole transitions from the ground singlet A 1 to the next excited doublet E of Tm 3+ ions. Unexpected fine structure of the transitions is detected at low temperatures. The new modes are assigned to local distortions of the sites with D 3 symmetry by Bi 3+ impurities, which resulted in the splitting of A 1 →E transi on. Two types of locally distorted sites are identified and investigated. The main contribution to the static magnetic susceptibility is shown to be determined by the matrix elements of the observed magnetic transitions. We demonstrate that even in case of local distortions the symmetry of the undistorted crystal is recovered for magnetic and for quadratic magnetoelectric susceptibilities.