According to Tax Ruling No.10804629000 issued by Taiwan Ministry of Finance (MOF) on November 15, 2019, starting from 2020 fiscal year, when conducting transactions with related parties, a company who meet the requirements is allowed to make one-time TP adjustment before closing the accounting records for the fiscal year.
According to Tax Ruling No.10804629000 issued by Taiwan Ministry of Finance (MOF) on November 15, 2019, starting from 2020 fiscal year, when conducting transactions with related parties, a company who meet the requirements is allowed to make one-time TP adjustment before closing the accounting records for the fiscal year. For the above eligibility criteria, please refer to Issue 139 e-Tax alert published on 2019/11/27.
To assist the companies who have imported goods from related parties and would like to adopt the abovementioned ruling, Taiwan Customs has recently released the “Guidelines on assessing one-time TP adjustment to determine the dutiable value” (the “Guidelines”) on December 31, 2019.
Compliance requirements basically can be distinguished into three phases: 1. upon importation during the year; 2. submitting the One-time TP Adjustment Application and 3. Customs Assessment Process. Based on the information which has been announced so far, in connection with one-time TP adjustment for imported goods’ value assessment, some key points are summarized as follows.
For the import goods from related parties and needs to make one-time TP adjustment, the requirement procedures stipulated in the Guidelines should be followed. To assist the companies in conducting the adjustment procedures smoothly, KPMG suggests that the companies could conduct a self-assessment step-by-step following with the below flow during the year.
In practical terms, the company may find that the collaboration between departments (e.g. supply chain, logistics, finance, sales team, etc.) would be needed in order to prepare required documents for the one-time TP adjustment application.
Thus, it is recommended that companies should consult with different fields of expertise before applying for the one-time TP adjustment.
Ellen Ting, Partner
Sylvia Chiang, Manager
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