The Supreme Administrative Court recently delivered a ruling in the case of Cadence Taiwan on its transfer pricing adjustment. Details of the decision are summarized below.
(a) Facts. The Taxpayer (Cadence Taiwan) is a subsidiary of Cadence US, which is in the business of electronic design automation. The Taxpayer provides Research and Development (R&D) services to Cadence US. In 2003, based on a transfer pricing study, Cadence US concluded that the service fees paid in 2…