Taiwan Transfer Pricing Policy
E-mail: tpe4ww@evershinecpa.com
or
Contact us during office hours (Taipei and China Time Zone)
Director Jerry Chu, USA Graduate School Alumni, and a well-English speaker
Mobile: +886-939-357-735
Tel No.: +886-2-2717-0515 ext. 103
TP-Q-10
Why kinds of scenarios will be adopted TP policy? What is the relevance between DTA and TP policy?
TP-A-10
When Taiwan Tax entity would like to pay out whatever business profits, Royalty, Technical Services fees, Interests, trading amount etc., it will adopt DTA tax rate. Its judge criteria, please see the Taiwan Treaty Page.
But if want to verify the above-mentioned amount if reasonable, will adopt Taiwan TP Policy.
TP-Q-20:
在台灣甚麼情況下, WFOE 外商投資企業不需要同時處理TP 申報和文件申報?
What are the scenarios in Taiwan, that a Wholly Foreign-Owned Entity (WFOE) is exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?
TP-A-20:
You are exempted from TP declaration and TP documentation if you fall into any 2 of the below scenarios:
- Total revenue (operating and non-operating) is less than NTD 30 million.
- No related entities outside of Taiwan has not claimed tax credits of more than NTD 500,000 per annum, not offset net operating losses aggregated in the past 10 years for more than NTD 2 million per annum, and has total revenue (operating and non-operating) of less than NTD 300 million per annum.
TP-Q-30:
在台灣甚麼情況下, WFOE 外商投資企業需要向該國的稅務局發送TP 申報? 甚麼是申報單名稱?
What are the scenarios in Taiwan, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration to the country’s tax bureau? What is the name of the TP declaration form?
TP-A-30:
When you have at least one related party transaction, there are no TP-specific returns to file but there is a requirement for TP disclosure in tax returns.
TP-Q-40:
在台灣甚麼情況下, WFOE 外商投資企業需要向該國稅務局發送TP 申請和文件? 甚麼 declaration 表單名和文檔名?
What are the scenarios in Taiwan, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration and TP documentation to the country’s tax bureau? What is the name of the TP declaration form and TP documentation form?
TP-A-40:
At least one related party transaction – TP disclosure in tax returns.
Total revenue (operating and non-operating) > NTD 300 million and related party transactions > NTD 200 million per annum – TP documentation form (local file).
Total revenue (operating and non-operating) > NTD 3 billion and related party transactions > NTD 1.5 billion per annum – TP documentation form (master file).
Consolidated Total Group revenue (operating and non-operating) > NTD 27 billion – TP documentation form (CbC Report).
Taiwan TRANSFER PRICING for professionals
Overview
Taiwan introduced a set of transfer pricing regulations similar to OECD. Ministry of Finance (MOF) promulgated Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm’s Length Transfer Pricing (TP Assessment Regulations).
Companies with related party transactions that meet certain revenue conditions are required to prepare transfer pricing study reports and disclose related party transactions on their corporate income tax returns.
MOF announced key criteria for audit targets such as cases that have profit margin lower than comparable industry, making losses or lower profit margin while the group makes profit as a whole, 2 years profit has been fluctuated abnormally, unreported controlled transactions in the prescribed forms and etc. Hence it is important to ensure transfer pricing regulations is comply at all times.
Chapter 1 Article 5 of the TP Assessment Regulations states the types of transactions governed, this includes
- Transfer of tangible/ intangible assets, including sale
- Use of tangible/ intangible assets, including lease
- Rendering of services, including marketing, management, technology, personnel, R&D, legal and accounting
Chapter 3 Article 10-13 of the regulations explain several accepted transfer pricing methods.
- Comparable Uncontrolled Price Method
- Resale Price Method (applicable for tangible assets only)
- Cost Plus Method
- Comparable Profit Method
- Profit Split Method
Chapter 4 Article 21 explain the transfer pricing documentation includes information to be provided upon tax filing, Master File and CbC Report.
Due dates and respective threshold:
| Preparer | Due Date | Threshold | |
| 1.TP declaration | |||
| 1.1 TP disclosure in tax return (No other TP-specific returns) | Every Ultimate Parent Company (UPC) or Affiliates in Taiwan. | Within 5 months after the end of fiscal year. | At least one related party transaction |
| 2. TP documentation | |||
| 2.1 Local File | Every UPC and CE in Taiwan. | Prepare 5 months after the end of fiscal year. Submit within 1 month when requested by tax authority. | Total revenue (operating and non-operating) > NTD 300 million and related party transactions > NTD 200 million per annum |
| 2.2 Master File | One of the Taiwan affiliates of MNC group | Prepare within the last day of the subsequent year – 31 December. Submit within 1 month when requested by tax authority. | Total revenue (operating and non-operating) > NTD 3 billion and related party transactions > NTD 1.5 billion per annum |
| 2.3 Country-by-Country (CbC) Report | UPE in Taiwan. | Submit within last day of the subsequent year – 31 December | Consolidated Total Group revenue (operating and non-operating) > NTD 27 billion |
Please be aware of below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.
Contact us:
E-mail: tpe4ww@evershinecpa.com
or
Contact us during office hours (Taipei and China Time Zone)
Director Jerry Chu, USA Graduate School Alumni and a well-English speaker
Mobile: +886-939-357-735
Tel No.: +886-2-2717-0515 ext. 103
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(version: 2024/07)
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