Taiwan Transfer Pricing Documentation: Local File, Master File and CbCR Thresholds

"營利事業應於稽徵機關書面調查函送達之日起一個月內提示第一項規定之移轉訂價報告" is a line from Article 22, paragraph 4 of Taiwan's Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing (營利事業所得稅不合常規移轉訂價查核準則, "the TP Regulations"). A company must present its transfer pricing report within one month after the tax office's written investigation notice is served. One extension of up to a month is allowed if requested before the first month runs out.

One month is short. The rule assumes the report already exists, and paragraph 1 of the same article says so: a company that engages in controlled transactions must have the report ready (備妥) when it files its income tax return for that year. The report does not go in with the return.

Who counts as related

Under Article 43-1 of the Income Tax Act, if a company affiliated with, or directly or indirectly owned or controlled by, another enterprise in Taiwan or abroad uses non-arm's-length arrangements to reduce its tax, the tax authority may adjust its income with the Ministry of Finance's approval. The TP Regulations implement this under Article 80, paragraph 5 of the Act (Art. 1); the current version dates from December 28, 2020.

Relationships are listed in Article 3. Holding 20% or more of the voting shares or capital, directly or indirectly, is one. Being the largest shareholder with at least 10% is another, as is sharing half or more of the directors. Branches are covered too. Item 7 links a foreign head office with its Taiwan branch, so the branch's dealings with head office are controlled transactions. The two forms are compared in Entering the Taiwan Market: Key Differences Between a Subsidiary and a Branch.

Three documents and their numbers

When other documents can replace the local file

Paragraph 3 of Article 22 lets a company at or below Ministry of Finance thresholds use other documents (替代文據) showing arm's length pricing instead of a full report. The thresholds come from a Ministry of Finance order of November 6, 2008 (台財稅字第09704555160號), applied from 2008 returns, and the Taxation Administration's safe harbour page, updated May 26, 2026, still lists that order and its amendments.

There are three tiers. Total annual revenue, meaning net operating revenue plus non-operating income, below NT$300 million qualifies. Revenue of NT$300 million to under NT$500 million qualifies only with no tax incentives or loss carryforward deductions (small exceptions apply) and no transactions with related enterprises outside Taiwan, head office and branches included. Failing both, controlled transactions below NT$200 million for the year still qualify.

That middle tier rarely helps a foreign-owned subsidiary. Buying goods from a US parent, or paying it a service fee, is a transaction with a foreign related enterprise. The NT$200 million figure adds up every type of controlled transaction, income and expense alike, in absolute amounts (point 3 of the order), leaving out amounts covered by an advance pricing agreement (Art. 22, para. 3).

What are the "other documents"? Point 4 of the order looks first for internal comparables with unrelated parties. Without them, one of several alternatives will do, including public tender documents, appraisal reports, or a transfer pricing report the foreign related party prepared under its own country's rules. A report by the US parent can qualify. Parts that plainly conflict with Taiwan's rules must be corrected.

Language matters. Under paragraph 5 of Article 22, foreign-language documents need a Chinese translation unless the tax office approves an English version.

What the annual return discloses

Each return must disclose related enterprises and related parties, a chart of the control and shareholding structure, and the transactions with them (Art. 21). Group members also name the Taiwan member filing the master file, the ultimate parent, and the CbCR filer or surrogate parent.

Scope comes from a Ministry of Finance order of January 9, 2007, applied from 2006 returns. With total revenue of NT$30 million or more and a related party outside Taiwan, a company discloses its related enterprises once dealings with any one of them reach NT$12 million a year, or with all of them NT$50 million. The Taipei National Taxation Bureau's return forms for tax year 2025 carry a dedicated schedule for this.

Master file and CbCR, from tax year 2017

A Taiwan member of a multinational group has the master file ready at filing and, under Article 21-1, submits it within one year after the fiscal year ends; a group with several Taiwan members may designate one. A Ministry of Finance order of December 10, 2019, applied from 2017 returns, exempts a member whose total revenue is below NT$3 billion or whose cross-border controlled transactions are below NT$1.5 billion. Both must be reached before the duty arises. An English master file needs a Chinese translation within one month after a written request.

For the CbCR, the ultimate parent's location decides. A Taiwan ultimate parent files when prior-year group revenue reached NT$27 billion, or EUR 750 million at the January 2015 rate (Art. 22-1; point 2 of the 2019 order).

When the ultimate parent is abroad, as in a US or Vietnamese group, the Taiwan member files locally only in three cases: the parent's country does not require a report; no agreement allowing CbCR exchange with Taiwan is in force before the filing deadline; or such an agreement exists but Taiwan cannot actually obtain the report. Even then, a member below the master file thresholds is exempt (point 2 of the 2019 order).

Exemption is not the end of it. Point 4 of the order lets the tax office, when an audit needs it, require by written notice a master file or CbCR the group must file under another member's country's rules. Both reports can be uploaded online year-round (National Taxation Bureau of Kaohsiung release, November 4, 2019). A US tax adviser can confirm what a US parent files at home.

When the documents are missing

Without a local file or alternative documents, the tax office sets the arm's length result from information it obtains; failing that, it may assess the related revenue, costs and expenses using industry profit standards (同業利潤標準) (Art. 33). Where income-related documents required by the Regulations are not submitted or presented, item 3 lets the tax office apply Article 46 of the Tax Collection Act: a fine of NT$3,000 to NT$30,000. The Ministry of Finance penalty reference table (稅務違章案件裁罰金額或倍數參考表, amended May 6, 2026) sets NT$3,000 for a first refusal, NT$9,000 for a second in a row, and NT$30,000 for each one after that.

An adjustment brings a different penalty. Article 34 applies Article 110 of the Income Tax Act where non-arm's-length pricing reduced the company's tax, the tax office adjusts its income, and any of these is true:

1. The reported price is at least twice, or at most 50% of, the arm's length price set by the tax office.
2. The added income is at least 10% of assessed annual income and at least 3% of assessed net operating revenue.
3. No transfer pricing report is presented and no other document proves arm's length pricing.
4. Undisclosed controlled transactions produce added income of at least 5% of assessed income and at least 1.5% of net operating revenue.

Paragraph 1 of Article 110 allows a fine of up to twice the tax shortfall where a filed return under-reports income. For corporate income tax, the reference table suggests 0.5 times a shortfall of NT$100,000 or less, 0.8 times above that, and a fine equal to the shortfall where the under-reporting was intentional. Nothing in the table is specific to transfer pricing.

Advance pricing agreements

APAs are open to companies whose covered transactions total NT$500 million or more, or NT$200 million or more a year, with no major tax evasion in the previous three years and the required documents and report in hand (Art. 23). The application is due before the end of the first fiscal year covered. A pre-filing meeting can be requested in writing up to three months before that year ends. Review takes one year from receipt of the documents, extendable by six months and then six more (Art. 26). An APA runs three to five years from the application year (Art. 27); a renewal cannot exceed five years (Art. 32).

Bilateral APAs go through mutual agreement under an applicable income tax agreement (Art. 23, para. 7). The Ministry of Finance's list of income tax agreements, updated September 4, 2026, includes Vietnam, in force since May 6, 1998, but no comprehensive agreement with the United States, only a 1988 shipping and air transport agreement.

If it is unclear which threshold your Taiwan company crosses, you can write to Hovering International Law Firm at wei@hoveringlaw.com.tw with last year's figures.

For a Taiwan company on a calendar year, the 2025 return was due between May 1 and May 31, 2026 (Income Tax Act Art. 71), and the local file should have been ready by then. If it must file a master file or CbCR, its 2025 reports are due by December 31, 2026.

Official sources

• Income Tax Act (所得稅法, last amended September 11, 2026), Art. 43-1, Art. 71, Art. 80, Art. 110
• Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing (營利事業所得稅不合常規移轉訂價查核準則, last amended December 28, 2020), Art. 1, Art. 3, Art. 21, Art. 21-1, Art. 22, Art. 22-1, Art. 23, Art. 26, Art. 27, Art. 32, Art. 33, Art. 34
• Tax Collection Act (稅捐稽徵法, last amended December 17, 2021), Art. 46
• Ministry of Finance orders: local file safe harbour (November 6, 2008, 台財稅字第09704555160號), master file and CbCR exemptions (December 10, 2019, 台財稅字第10804651540號), related-party disclosure scope (January 9, 2007, 台財稅字第09604503530號)
• Ministry of Finance, 稅務違章案件裁罰金額或倍數參考表 (amended May 6, 2026; Income Tax Act and Tax Collection Act tables)
• Taxation Administration, 移轉訂價報告避風港標準 (updated May 26, 2026)
• National Taxation Bureau of Kaohsiung, release of November 4, 2019; National Taxation Bureau of Taipei, 2025 corporate income tax return forms (updated February 9, 2026)
• Ministry of Finance, Department of International Fiscal Affairs, list of income tax agreements (updated September 4, 2026)
• Official English titles of the statutes checked at law.moj.gov.tw/ENG

Checked: October 6, 2026