Taiwan: Customs requirements when making one-time transfer pricing adjustments
Customs requirements in assisting companies in adopting the transfer pricing adjustment (TPA) ruling
Customs requirements when making one-time transfer pricing adjustments
The Taiwan Customs Bureau released “Guidelines on assessing one-time TP adjustment to determine the dutiable value” (guidelines), which clarify the customs requirements for a taxpayer who would like to make a transfer pricing adjustment on imported goods.
The Taiwan Customs Bureau summarized some “frequently asked questions” (FAQs) on how to comply with the customs requirements in assisting companies in adopting the transfer pricing adjustment (TPA) ruling.
The TPA ruling offers an opportunity for multinational enterprises (MNEs) to make the post-importation adjustment on the price of imported goods in Taiwan. However, whether companies can claim such transfer pricing adjustment for income tax purpose will also depend on whether customer procedures are met.
There is a possibility that the Taiwanese companies may need to make one-time transfer pricing adjustments on purchase of goods from offshore related parties.
The companies need to evaluate the actions, and parties need to be involved to obtain the required documents, potential effects and obstacles to the logistic and business operations while applying the required customs procedures.
Customs authorities remind companies that they cannot combine the amount transfer pricing adjustment to just one or few transactions as it could distort the import values. Companies need to take action earlier to secure a position to claim the transfer pricing adjustment for income tax purpose.
Read a September 2021 report prepared by the KPMG member firm in Taiwan
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