Tag: One-off adjustments

Year-end adjustments realigning controlled transaction results with arm’s length outcomes after the pricing period closes. Tax authorities challenge these as retrospective profit manipulation, especially where losses are reallocated via year-end entries lacking contemporaneous documentation.

Taiwan vs Weitian Technology Co. Ltd. December 2020, Supreme Administrative Court, Case No 109 Pan Tzu No. 661

Taiwan vs Weitian Technology Co. Ltd. December 2020, Supreme Administrative Court, Case No 109 Pan Tzu No. 661

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