Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing Article 2

The transactions concerning allocation of the revenue, cost, expenses, and profit or loss between or among a domestic enterprise and other domestic or foreign profit-seeking enterprises with which it has an associated relationship, and those between or among such an enterprise and another enterprise by which it is directly or indirectly owned or controlled shall conform to regular business practice so as to enable the accurate computation of tax liabilities of these enterprises within the territory of the Republic of China ("ROC").In the event that the arrangements for the transactions of the profit-seeking enterprises referred to in the preceding paragraph result in an evasion or reduction of their tax liabilities within the territory of the ROC, the collection authorities-in-charge, for the purpose of accurate computation of the taxable income and tax liabilities of the relevant profit-seeking enterprises, may conduct investigations in accordance with any applicable acts and, subject to the approval of the Ministry of Finance ("MOF"), make an adjustment in accordance with regular business practice pursuant to the provisions set out in Article 43-1 of the ITA.The transactions concerning allocation of the revenue, cost, expenses, and profit or loss between or among companies subject to the provisions set out in the Financial Holding Company Act or the Enterprise Merger and Acquisition Act and their subsidiaries, and those between or among such companies or their subsidiaries and other local or foreign individuals, profit-seeking enterprises, as well as educational, cultural, public welfare, and charity institutions or organizations shall conform to regular transaction practice.In the event that the arrangements for the transactions of the companies referred to in the preceding paragraph result in an evasion or reduction of their tax liabilities within the territory of the ROC, the collection authorities-in-charge, for the purpose of accurately computing the taxable income and tax liabilities of the relevant taxpayers, may conduct investigations in accordance with any applicable acts and, subject to the approval of the respective competent authorities, make an adjustment in accordance with regular transaction practice pursuant to the provisions set out in Paragraph 1, Article 50 of the Financial Holding Company Act or Subparagraph 1, Paragraph 1, Article 47 of the Enterprise Mergers and Acquisitions Act.