A Taiwanese LED company claimed a year-end sales allowance to offset losses in its Shanghai subsidiary, arguing market factors had been overlooked in its transfer pricing. The tax authority disallowed the deduction for lack of documentation. Taiwan's Supreme Administrative Court upheld the denial in 2020, finding the company had provided only internal approvals and debit notes, with no evidence of agreed terms, price-relevant factors, or transaction-level adjustment methodology ... Read more

Goodland Taiwan sold machines to a local buyer through a related Hong Kong intermediary, avoiding tax on sales profits. The Taiwanese tax authority issued an assessment, which Goodland challenged in court. The Supreme Administrative Court dismissed the appeal in February 2020, upholding the recharacterisation of the transaction and confirming the assessment in favour of the tax authority ... Read more

Intracom Taiwan deducted losses on intra-group receivables and management fees in its taxable income. The Taiwanese tax authority partially denied these deductions due to insufficient documentation and lack of economic substance. In November 2018, Taiwan's Supreme Administrative Court dismissed Intracom's appeal, confirming that the taxpayer failed to meet statutory documentation requirements for both the bad debt and management fee deductions ... Read more

A Taiwanese distributor in the Jat Health Corporation group deducted amortisations and royalty payments related to acquired distribution rights for medical equipment. The tax authority partially disallowed these deductions, finding the expenditure was not necessary or reasonable given the company's rapid revenue growth. The Taiwan Supreme Administrative Court dismissed the taxpayer's appeal in 2018, upholding the assessment and placing the burden of proof on the taxpayer to justify the payments ... Read more

Cadence US instructed its Taiwanese subsidiary to book retroactive sales allowances to reduce R&D service fees paid in 2002, based on a later transfer pricing study. Taiwan's Supreme Administrative Court upheld the tax authority's position in 2012, finding the adjustments lacked economic substance as the service agreement contained no retroactive pricing provisions and Cadence Taiwan never formally agreed to the debit notes ... Read more