A profit-seeking enterprise undertaking Controlled Transactions, when filing the current-year income tax returns or making a current-year final report, shall prepare a transfer pricing report containing at least the following information of the profit-seeking enterprise:

1. 

A comprehensive business overview, including history, a detailed description of business activities and business strategies pursued by the enterprise, analysis of industry and economic conditions, major competitors, and analysis of economic and legal factors that affect transfer pricing, as well as an indication whether the enterprise has been involved in or affected by business restructuring or intangible transfers in the present or immediately past year and an explanation of those aspects of such transactions affecting the enterprise.

2. 

A description of group organization and management structure, including the management structure and organizational chart, a description of the individuals to whom local management reports and the countries in which such individuals maintain their principal offices, register of directors, supervisors, and managers and data of change one year before and after the current year.

3. 

Summaries of Controlled Transactions, including:

(1)

A description of the types of major transactions and their backgrounds, including procedures, dates, transaction subjects, quantities, terms of sale, contract clauses and purposes of the assets or services of the transactions. The description shall explain the sale or use and benefits concerned.

(2)

The parties involved in each type of Controlled Transactions and the relationship amongst them.

(3)

The amount of payments and receipts for each type of Controlled Transaction involving the enterprise broken down by country or jurisdiction of the payor or recipient.

(4)

Copies or their abridged versions of all material intergroup agreements concluded by the enterprise.

4. 

Controlled Transaction analysis:

(1)

An analysis on the function and risk of each party involved in the Controlled Transaction, including any changes compared to prior years.

(2)

A description of an instance complied by the principle of Article 7.

(3)

Comparability analysis, a description of comparables and comparable uncontrolled transactions selected by the principle of Article 8, and related information thereof.

(4)

Risk analysis by the principle of Article 8-1.

(5)

An analysis on the most appropriate Arm's-length Method determined in accordance with Article 9.

(6)

An estimation of whether the allocation of profits in the Controlled Transaction is at arm’s length while the Business Restructuring is involved, in accordance with Article 9-1.

(7)

An estimation of whether the allocation of profits in the Controlled Transaction is at arm’s length where the transaction of Intangible Assets is involved, in accordance with Article 9-2.

(8)

A description of the tested party and the most appropriate Arm’s-length Method selected, the reasons for this selection, and an explanation of why alternative methods were not selected.

(9)

Transfer Pricing method of related parties for conducting controlled transactions and relevant data.

(10)

The conclusion of measurement of the method selected by the most appropriate method including the information of selected comparables and comparable Uncontrolled Transactions (including profit level indicators), and the source of such information, the adjustments made to eliminate the difference of factors and assumptions prescribed in Subparagraph 1 of Article 9, assumptions used, arm’s length range, the result of the conformation of the arm’s length and the adjustments based upon the results of the arm’s length transactions, as well as a summary of financial information used in applying the Arm's-length Method. An explanation of the reasons for performing a multi-year analysis under the proviso of Item 1, Subparagraph 4 of Article 7.

(11)

A copy of existing unilateral advance pricing agreements and any advance rulings concerning cross-border income distribution with other countries or jurisdictions, and which are related to Controlled Transactions described above.

5. 

Statements and consolidated reports of the Affiliated Enterprises and other materials as required pursuant to Article 369-12 of the Company Law.

6. 

Other documents in relation to related parties or controlled transactions, which may affect pricing, if any.

In the event that the relationship between two profit-seeking enterprises, due to special market or economic conditions, satisfies the criteria prescribed in Items 3 to 5, Subparagraph 8, Article 3 hereinabove, but nevertheless do not have de facto controlling or subordination relationships, the taxpayers may, prior to filing their annual income tax returns, produce sufficient evidentiary documents to the collection authorities-in-charge for ratification. Once the documents provided have been ratified, the requirements of the transfer pricing report set forth in the preceding paragraphs shall not apply.

Where the total amount of revenue and the amount of Controlled Transactions of a profit-seeking enterprise engaged in Controlled Transactions below the standards as prescribed by the MOF, the transfer pricing report as described in Paragraph 1 of this Article can be replaced with other substitute document that prove the pricing of the Controlled Transactions are at an arm’s-length result. The amount of Controlled Transactions excludes the amount of any transaction that is signed in an advance pricing arrangement with the collection authorities-in-charge.

When the collection authorities-in-charge conduct the investigation pursuant to the Regulations, the profit-seeking enterprises shall produce the required transfer pricing report set forth in Paragraph 1 of this Article or the substitute document set forth in the preceding paragraph within one month after receipt of a notice of investigation sent by the collection authorities-in-charge. In the event that the required transfer pricing report or substitute document cannot be produced within the prescribed time limit, the taxpayer should apply for an extension prior to the deadline. The extension can be granted only once and cannot exceed one month. The profit-seeking enterprise should, within one month, provide additional supporting documents as deemed necessary by the collection authorities-in-charge after reviewing the provided transfer pricing report or the substitute document.

The transfer pricing report or the substitute document provided by profit-seeking enterprises pursuant to the preceding paragraphs should contain a table of contents and an index. Chinese translation shall be attached if the materials provided are in a foreign language, unless otherwise agreed by the collection authorities-in-charge with the provision of the English documents.