The Ministry of Finance (MoF) recently issued a tax ruling to relax the amount threshold for waiving the separate analysis requirement for controlled transactions. The ruling reduces the burden placed on taxpayers in preparing transfer pricing analysis for small, controlled transactions and effectively resolves an issue listed in the ECCT Tax committee's 2014 Position Paper.

Regarding the transfer pricing safe harbour rules, according to the Tax Ruling no. 09704555160 issued by the MoF on 6 November 2008, for a profit-seeking enterprise which is required to prepare a transfer pricing report (TPR) with individual controlled transaction amount below certain threshold, if the enterprise can prepare other documents sufficient to prove the arm's length nature of the controlled transaction and state the reasons in the TPR, the transaction would be considered arm's length and exempted from separate analysis. The MoF has announced the Tax Ruling no. 10304578300 issued on 2 February 2015 to amend and relax the aforementioned amount threshold for waiving the separate analysis requirement for controlled transactions. The amendment is applicable to profit-seeking enterprise income tax returns for the 2014 tax year and onwards.

Members of the Tax committee regard this action as important progress in helping to improve the tax environment in Taiwan. It has been achieved thanks to the effective platform and excellent cooperation between the ECCT's Tax committees and tax authorities under the MoF.