The collection authorities-in-charge shall conduct investigations on the Transfer Pricing of profit-seeking enterprises in accordance with the following rules:
1. Provided that the profit-seeking enterprises have produced the transfer pricing report or the substitute document as required by Article 22 hereof, the collection authorities-in-charge shall assess the Arm''s-length result of the Controlled Transactions pursuant to the Regulations, and assess the taxable income of related taxpayers.
2. Provided that the profit-seeking enterprises have not or cannot produce the transfer pricing report or the substitute document pursuant to Article 22 hereof, the collection authorities-in-charge may make an assessment in light of available data in accordance with the preceding subparagraph. In the event that no available data and the transfer pricing report or the substitute document which the profit-seeking enterprises failed to produce are relevant to the revenue, costs, or expenses, the collection authorities-in-charge may refer to the relevant business net profit, operating cost and operating expense to compute the taxable income according to the profit standard of the same trade concerned pursuant to Article 83 of the ITA and Article 81 of the Enforcement Rules of the ITA.
3. If the profit-seeking enterprises fail to submit or provide the information or document related to their taxable income, the collection authorities-in-charge may handle the case pursuant to Article 46 of the Tax Collection Act.

Profit-seeking enterprises undertaking Controlled Transactions shall determine the Arm’s-length result of the Controlled Transactions and report the taxable income in accordance with the criteria set forth in the ITA and these Assessment Regulations. Where the profit-seeking enterprises failed to comply with the Assessment Regulations thereby resulting in a reduction of tax payable, and the collection authorities-in-charge have made transfer pricing adjustments and assessed the taxable income of related taxpayers in accordance with the ITA and these Assessment Regulations, Article 110 of ITA shall apply to the following specific tax omission or under-reporting situations:
1. The reported price of Controlled Transaction is two times or more than the Arm’s Length price assessed by the collection authorities-in-charge; or lower than 50% of the Arm’s-length price.
2. The increase in taxable income of the Controlled Transactions adjusted and assessed by the collection authorities-in-charge is more than 10% of the annual taxable income of the enterprise; and more than 3% of the annual net operating revenue.
3. A profit-seeking enterprise cannot produce transfer pricing report as required under Paragraph 1 of Article 22 thereof, and no other documents evidencing the transactions is Arm’s-length result.
4. The increase in taxable income of the Controlled Transactions, which are not disclosed in the report or transfer pricing document in accordance with Articles 21 to 22-1 by a profit-seeking enterprise, adjusted and assessed by the collection authorities-in-charge is more than 5% of the annual taxable income of the enterprise; and more than 1.5% of the annual net operating revenue.

In the event that the collection authorities-in-charge have conducted an investigation pursuant to the Regulations with respect to the revenue, costs, expenses, or the profit and losses allocation of the Controlled Transaction conducted by a profit-seeking enterprise, and the Arm’s-length adjustments have been assessed and approved by the MOF or the competent authorities as set forth in Article 50 of the Financial Holding Company Act, the collection authorities-in-charge shall make corresponding adjustments to the counter-party of the Controlled Transaction provided that it is a taxpayer under ROC tax jurisdiction.