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.

KPMG observation

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

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.