The Tax Administration of the Ministry of Finance (MOF) has published a draft amendment to the transfer pricing guidelines for public consultation on 27th July 2017. According to the draft regulations, the Master File should include an overview of the multinational enterprise (MNE) group, including the group’s organizational structure, overall business activities, intangible arrangements, and intercompany financing transactions.
Master file: According to the draft amendment to the transfer pricing guidelines for public consultation released on 27 July 2017 the reporting structure of the Master File should be line with the Action 13 of the OECD Base Erosion and Profit Shifting (BEPS) project. Taxpayers are required to complete the master file when filing the corporate income tax return and submit it to the competent tax authority within 12 months after the fiscal year end.
Local file: Taxpayers are required to prepare a Local File when total annual revenue exceeds TWD 500 million. The local file is required to be completed with the annual income tax return and the taxpayer must submit it to the tax authority within one month after receipt of the tax authority’s request.
Penalty for non-compliance: According to draft amended guidelines, an enterprise that fails to submit the required documents shall be subject to a penalty of no less than NT$3,000 but no more than NT$30,000.
