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Transfer pricing

Transfer Pricing

Transfer Pricing

Taiwan introduced a set of transfer pricing regulations similar to those of the OECD in late 2004. In accordance with these 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. Transfer pricing traditionally occurs where goods or services move between related parties across national borders. Companies engaged in such transactions have to be well-prepared to tackle complex regulations in Taiwan. The Grant Thornton tax team assists such companies by providing three types of transfer pricing services - documentation, planning and defense. 



Grant Thornton Taiwan prepares transfer pricing study reports according to Taiwanese laws and regulations, with content and data collection methodologies following the guidelines of Grant Thornton International. Tax specialists from Grant Thornton Taiwan attend international transfer pricing trainings conducted by Grant Thornton International and actively exchange knowledge with other Grant Thornton member firms. As penalties for incorrect transfer pricing documentation can be severe, these services are seen as essential by many of our clients in Taiwan. 


Three layers of transfer pricing documentation

Effective from 2017, taxpayers meeting certain criteria need to prepare three layers of transfer pricing documentation. See quick overview below.

Type of document


Master File

Annual revenue plus non-operating income for the Taiwan entity exceeds NTD 3 billion, and carried out related-party transactions in excess of NTD 1.5 billion per annum.

Local TP file

Same as existing criteria: annual revenue exceeding NTD 300 million and related-party transaction amounts of more than NTD 200 million

Country by Country report (CbCR)

Consolidated total group revenue for the prior year is in excess of NTD 27 billion.

Deadline for filing Master File and CbCR is end of the following year.


Procedures to be completed on corporate income tax returns

Business entities must check a box on their corporate income tax return to indicate whether or not they need to prepare a full transfer pricing report. If a full report is required, then the business will need to check a second box to indicate whether the transfer pricing report is complete and ready for presentation at the time of filing the corporate income tax return.

When a business entity is required to prepare a transfer pricing report, the CPA appointed to conduct the entity’s tax compliance audit must state in the audit report whether the transfer pricing report has been prepared in compliance with Taiwan’s Transfer Pricing Audit Regulations and whether any tax adjustment is needed.


Burden of proof

The burden of proof that transfer pricing arrangements are within arm’s length rests on the shoulder of the taxpayer. Business entities are urged to exercise caution and ensure that proper documentation is in place.


Deadline extensions

Article 22 of the Transfer Pricing Audit Regulations allows a business entity to obtain a maximum two-month extension to present its transfer pricing report upon request by a tax officer. The corporate income tax filing deadline is five months after end of the fiscal year. If a business entity checks the box on its corporate income tax return stating that the transfer pricing report is not yet ready, this action by itself may alert tax officers, who may in turn conduct a tax inspection. Such an inspection could not only consume considerable time and energy of the taxpayer in preparing a defense, but it could also lead to subsequent tax adjustments.



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.

Business entities that can use alternative supporting documents as a substitute for a full transfer pricing report still need to ensure that related party transactions are carried out within arm’s length. If no appropriate alternative supporting documents can be identified, we recommend that the business entity work with our transfer pricing tax specialists to plan alternative solutions.


The growth or restructuring of a company doing international business can provide a good opportunity to review transfer pricing practices and international tax planning. Specialists from our firm have considerable experience managing these types of reviews. 


Legal defense during transfer pricing disputes can take a long time to resolve and inevitably requires digging through old records. Grant Thornton tax specialists have experience negotiating with tax officers, as well as representing clients in tax courts.

Manager, Transfer Pricing Division

Mike Lai

International transfer pricing e-book

If you would like an overview of different transfer pricing rules and regulations in key countries and details on contacting Grant Thornton, view our international transfer pricing e-book.