On 28 August 2026, the NTBT clarified documentation requirements for profit-seeking enterprises reporting export sales allowances under the Income Tax Act. When Taiwanese companies grant price reductions or allowances to foreign buyers on exported goods or services, they must maintain comprehensive evidence from the overseas manufacturers to substantiate the deduction for corporate income tax purposes.
Key Takeaways
- Mandatory Documentation: Enterprises must retain original contracts, credit notes, correspondence, and payment records from foreign manufacturers confirming the allowance amounts and commercial reasons.
- Transfer Pricing Compliance: The documentation must demonstrate that allowances are consistent with arm’s length principles and not used for profit shifting to related parties abroad.
- Audit Risk Mitigation: Failure to provide adequate foreign manufacturer evidence during tax audits may result in disallowance of the deduction, additional tax assessments, and penalties under the Tax Collection Act.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement