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Taiwan Customs Value for Related-Party Imports: Price Tests, Year-End True-Ups and Advance Rulings
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Taiwan Customs Value for Related-Party Imports: Price Tests, Year-End True-Ups and Advance Rulings

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"The transaction value shall not be used as the basis for determining and calculating the customs value of imported goods … where the buyer and seller have a special relationship and such relationship influences the transaction value." That is item 4 of Article 30(1) of Taiwan's Customs Act, in the government's official English translation. For a US group whose Taiwan subsidiary buys from an affiliate, the last six words carry the weight.

A group may invoice intercompany sales at a provisional price and true up to a target margin after the books close. Whether that true-up can change Taiwan duty already paid is settled on the day the goods are declared.

A related-party price is tested before it is set aside

Under Article 29, the customs value (完稅價格) of goods dutiable by value starts from the transaction value: the price actually paid or payable for goods sold from the exporting country to Taiwan. If not already in the price, customs adds buyer-borne commissions and packing, a reasonable share of materials, dies or overseas design work the buyer supplied to the seller free or at a reduced price, royalties and fees the buyer pays under the terms of the sale, and freight and insurance to the Taiwan port. A trademark fee paid to the US parent may belong here.

Eight kinds of special relationship (特殊關係) are listed in Article 30(2), including one party directly or indirectly owning, controlling or holding 5% or more of the other's voting shares, or directly or indirectly controlling the other. A parent and its subsidiary will almost always qualify. That alone does not sink the price.

Article 14 of the Enforcement Rules of the Customs Act sets the test. If customs doubts a related-party price, it must examine the circumstances of the sale and may ask for more detail. If it finds that the relationship influenced the price, it must say why and give the importer a reasonable chance to respond, in writing if the importer asks. The price is treated as unaffected if it is "close to" (相接近) any one of three values that customs has determined for identical or similar goods: a transaction value between unrelated parties, a deductive value based on Taiwan resale prices, or a computed value. Comparison goods must have been exported (first and third tests) or imported (second test) within 30 days before or after the export or import date of the goods being valued.

So how close is close? No official text opened for this column puts a number on it. The Customs Administration's FAQ gives one example: an importer buying cars from a supplier in a parent–subsidiary relationship with it declared prices more than 20% below the previous year, although the cars came with much better equipment. The importer could not show closeness to any test value, and the FAQ concludes that the relationship had influenced the price. The 20% is a fact of that example.

When the transaction value cannot be used, customs moves down a fixed ladder: identical goods (Article 31), similar goods (Article 32), deductive value (Article 33), computed value (Article 34) and reasonable means (Article 35). At the importer's request, the deductive and computed methods can swap places (Article 33(2)).

Year-end true-ups: the one-time transfer pricing scheme

On November 15, 2019 the Ministry of Finance issued an order (台財稅字第10804629000號) setting conditions, from tax year 2020, for a one-time transfer pricing adjustment before the year-end closing. The related parties must have agreed in advance on the terms and on every factor that affects the price, and must have booked the adjusted receivables and payables. The counterparty must make a matching adjustment at the same time. The related taxes must then be paid at the adjusted price. For imports, the procedure sits in the Customs Administration's directions (作業要點), issued on December 31, 2019 and last amended on April 22, 2022.

  1. At import, before taking delivery: apply for release against a deposit under Article 18(3)(iii) of the Customs Act, with an invoice marked as estimated (預估) and a price declaration (貨價申報書). On the import declaration, enter code "138" in the special-relationship field, "65" (estimated tax) in the payment-method field, and a remark naming the fiscal year. Clearance is by document review or physical inspection.
  2. Within one month after the fiscal year ends: file the application (declaration numbers and items, provisional and final invoice prices, and the pricing reasons or method), a reconciliation table, and the contracts, final invoices and payment records. Late applications are not accepted; customs then sets the value itself. Missing documents are due within 15 days of a notice.
  3. Customs decides within four months from the day after receipt, extendable once by up to two months. Deposits come back without interest. A company that disagrees can seek re-examination (復查) under Article 45 within 30 days from the day after it receives the duty bill.

Customs reviews only the customs value. Transfer pricing review stays with the National Taxation Bureau; a transfer pricing report may go in as a reference document, while customs still values the goods under its own valuation rules (scheme FAQ, Q7 and Q8). Adjustments go declaration by declaration and item by item, with before-and-after amounts (Q6). Exports are outside the scheme (Q13). A refund of business tax (Taiwan's VAT) collected at import counts as a reduction of input tax (MOF order, point 2).

Income-tax rules still apply in full: point 4 of the order requires a company using the scheme to follow Income Tax Act Article 43-1 and the transfer pricing audit regulations in that year's return. Documentation thresholds are covered in Taiwan Transfer Pricing Documentation. How the true-up is reported in US filings is a question for US advisers.

What about entries that were never flagged? The customs FAQ says plainly that the remarks cannot be added afterwards (Q2). No official guidance was found on how customs treats price changes decided after year-end or imposed in a tax audit. The only route the FAQ mentions is the general correction of an import declaration within six months after the day following release (correction regulations, Article 6).

What an advance ruling covers

Article 36-1 lets the duty payer ask the Customs Administration, before import, whether the price actually paid or payable contains, or must have added, Article 29(3) items or other amounts belonging in the customs value. A June 2021 Customs Administration press release directs applicants to Keelung Customs. Under the Regulations Governing the Implementation of Customs Valuation Advance Ruling on Imported Goods, last amended on January 23, 2026, a written reply is due within 45 days from the day after a complete application arrives, or up to 90 days if outside experts or bodies must be consulted (Article 7). A ruling is valid for three years from the notice date unless changed (Article 9).

That is as far as it goes. No official text found offers an advance ruling that a related-party price will be accepted, or one on a transfer pricing method. Classification (Article 21) and origin (Article 28) rulings run under their own regulations.

If customs finds the value under-declared

False declarations of value fall under Article 37(1) of the Customs Anti-smuggling Act. Depending on the circumstances, customs may impose a fine of up to five times the duty evaded, confiscate the goods, or both. Negligence is enough, according to a 2008 Ministry of Finance ruling. The actual multiple comes from the ministry's reference table as amended in June 2023 (MOF order of June 20, 2023):

Import duty evadedStandard multipleWith payment before the decision, etc.
NT$100,000 or less2×1.5×
Over NT$100,000 up to NT$500,0002.5×2×
Over NT$500,0003×2.5×

The lower multiple applies if, before the penalty decision, the duty is paid or the company agrees to cover it from a sufficient deposit, or if the goods are re-exported with approval or abandoned in writing before release. On evaded duty of NT$200,000 the fine would be NT$500,000. Paid before the decision, it drops to NT$400,000 (our arithmetic from the table).

There is a way out for errors found in-house. Under Article 45-3, no penalty applies within the corrected scope if the company applies to correct the declaration before customs, the tax authority or another enforcement agency gets a tip-off or starts an investigation, customs accepts the correction, and, for released goods, no post-release audit has been notified. The underpaid duty must be paid with interest.

Import VAT moves too. As of October 2026, customs collects business tax at 5% on the customs value plus import duty and any commodity tax (Business Tax Act, Articles 20 and 41; customs FAQ). Where an Article 37(1) case ends in a fine without confiscation, customs also recovers the VAT and penalizes it separately under Article 51(1)(vii) of the Business Tax Act (MOF manual on customs-collected business tax).

Time limits run from release. If customs gives notice of a post-release audit (事後稽核) within six months from the day after release, it may audit within two years after release, and any refund or extra duty must be made within three years (Customs Act, Article 13).

Hovering International Law Firm takes these questions at wei@hoveringlaw.com.tw; the subsidiary's fiscal year-end and whether this year's entries carry codes 138 and 65 are a useful start. For entries cleared without them, the six-month correction window after release comes first.

Official sources

Checked: October 7, 2026

Frequently Asked Questions

Will a year-end transfer pricing true-up change the Taiwan import duty we already paid?
Only for entries declared under the one-time transfer pricing scheme: special-relationship code 138, payment code 65 and a deposit at import. The company then applies to customs within one month after its fiscal year ends, and duty and customs-collected taxes are paid or refunded. Entries not flagged at import cannot be added later; the customs FAQ points only to the general correction route within six months after release.
Does Taiwan Customs reject an intercompany price just because the parties are related?
No. Article 30 of the Customs Act bars the transaction value only where the special relationship influenced the price. Customs must give reasons and a chance to respond, and the price is accepted if it is close to one of three test values that customs determines for identical or similar goods. No official text found defines close as a percentage.
Can we get an advance ruling that our related-party price is acceptable?
The valuation advance ruling under Article 36-1 covers whether royalties, assists, commissions and similar amounts belong in the customs value. A reply is due within 45 days, and the ruling is valid for three years. No official text found offers a ruling on whether a related-party price or a transfer pricing method is acceptable.

This article provides general information and is not legal advice on any individual matter.

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