Publications

Many foreign enterprises operating in Taiwan through a local subsidiary or branch adopt a cost-plus approach to determine the Taiwan entity's remuneration. Under this model, the Taiwan company typically provides support, maintenance, or business services to the foreign parent or affiliated company, while the foreign entity sells goods directly to Taiwanese customers and ships from abroad.

Taiwan’s Ministry of Finance has announced that it will require taxpayers who meet certain criteria to prepare three layers of transfer pricing documentation.

Grant Thornton Taiwan recommends that clients review their transfer pricing policy regularly and take any needed action to address documentation requirements before the corporate income tax filing deadline.

Article 1 of the Value Added and Non-Value Added Business Tax Act states “business tax, in the form of valueadded or non-value-added tax, shall be levied upon the sale of goods and services within the territory of the R.O.C. as well as upon imported goods.”

A TP report should include the following contents: background information and industry overview, functional and risk analysis of all transacting parties, evaluation of each controlled transaction based on prescribed rules, selection of comparable parties based on certain criteria, analysis of degrees of comparability, selection of the most appropriate method, disclosure of pricing strategy and other relevant information regarding other participants in the controlled transactions, and determination of whether the controlled transactions are within arm’s length range.