【Taiwan Tax】

Taiwan taxation - common scenarios of non- reporting of business tax return

Case study:

According to Article 35 of Value-added and Non-Value-added Business Tax Act (hereafter referred to as Business Tax Act), except as otherwise prescribed by this Act, any business entity, with or without sales, shall file a tax return on a bimonthly basis for its sales amount, tax payable or overpaid tax amount within 15 days of the following period with tax deduction and any other relevant documents attached to the governing tax authority. If there is any business tax payable, it shall be paid to the Treasury in advance with the receipt attached to the tax return for filing.

Common scenarios of non-reporting of business tax returns

A. Non-filing by companies which did not purchase uniform invoice or are without sales

The most common case of non-filing is by newly established companies which often assume that since they did not purchase uniform invoice, there is no sales amount to report, and hence they do not need to file business tax return. As a result, they are penalized by fines for non-filing.

B. Business entities under dissolution or deregistration.

All companies apply for dissolution shall complete the Business Tax Return form and submit it together with the uniform invoice details and any relevant tax deduction documents to the governing tax authority within 15 days from the date of fact. If there is any business tax payable, it shall be paid to the Treasury in advance with the receipt attached to the tax return for filing.

C. Online Transaction

1. For sales amount less than $80,000 ($40,000 for sale of services): the business entity is not required to be registered with tax number.
2. For sales amount between $80,000 and $200,000: the business entity is required to be registered with tax number and the applicable tax rate is at 1%. The National Taxation Bureau shall assess the tax payable amount based on the actual transaction amount of that quarter.
3. For sales amount over $200,000: the business entity is required to be registered with tax number and the applicable tax rate is at 5%. In cases where uniform invoices are used, the input tax can be deducted.