VAT Number Format In Taiwan

VAT number in Taiwan contains 8 digits (e.g., 01234567).

VAT Rates In Taiwan

The standard VAT rate applicable to almost all goods and services in Taiwan is 5%.

• 5% (Standard) – Applies to all taxable supplies, with certain exceptions
• 0% (Zero) – Exportations

Besides the standard VAT rate, Taiwan also has a special VAT, called GBRT for various services:

• 15% (higher rate) – entertainment and restaurants
• 25% (higher rate) – female meeting services
• 3% (reduced) – foreign investment company services
• 2% (reduced) – financial services
• 1% (reduced) – reinsurance services.

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VAT Payments And Returns In Taiwan

All businesses with Taiwanese VAT number must submit periodic VAT reports and payments.

VAT Returns Frequency In Taiwan

Taiwan requires a bi-monthly tax return on a prescribed form for its sales amount and tax payable or overpaid of the preceding two months together with a tax deduction and other appropriate documents with the competent tax authority before the fifteenth day of the following period.

Penalties in case of late filings or misdeclarations

In the case of the late filing of VAT returns and payments, the Taiwanese government prescribed the penalties as follows:

• Non-compliance with tax regulations will trigger fines of between NT$1,500 (EUR 45) and NT$15,000 (EUR 450).
• Non-submission and late submission of tax statements will trigger a penalty of between NT$3,000 (EUR 90) and NT$30,000 (EUR 900).

According to Regulations Governing the Use of Uniform Invoices, article 9, business entities shall provide:

• the alphabetical letters and numbers of the uniform invoice
• date of invoice issuance
• full description of goods and services provided
• quantity of goods and services provided
• net price per unit
• item subtotal
• sales amount
• rate and amount of VAT applicable for the category of goods and services provided
• the invoice total, the gross amount
  

Non-compliance with invoicing regulations will trigger a fine between NT$3,000 (EUR 90) and NT$30,000 (EUR 900), and 1% of the sales amount on the uniform invoice.

Taiwanese government introduced mandatory electronic invoicing for all B2G transactions. Electronic invoicing in B2B and B2C is not compulsory at this moment.

GUI – Electronic uniform invoices

What is Taiwan’s eGUI system?

eGUI system is a special system developed by the Taiwan government. The main purpose of this system is to eliminate the grey economy and establish a transparent environment for both sellers and customers. In the middle of the 20th century, the Taiwanese government introduced an invoice lottery system to encourage customers to request an invoice in order to increase compliance with its tax regulations. That lottery system is actual today as well, and millions of Taiwanese customers are part of it.

The uses of uniform invoices are as follows:

• The invoice issuer retains the retention media file.
• The receipt media file is given to the purchaser as a receipt. If the purchaser is a business entity, it could be used as an accounting voucher and for a tax deduction or reduction declarations according to the provisions of the Act.
• The certification media file is transmitted to the E-Invoice Platform of MOF (hereafter called “the Platform”) by the invoice issuer as certification.

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Obtaining GUI

When purchasing uniform invoices for the first time, business entities shall apply with the competent tax authority to obtain a uniform invoice purchase certificate. The purchase certificates are required to be stamped with the unique uniform invoice seal of the entity.

The unique uniform invoice seal shall contain the name, the uniform serial number, and the address of the business entity, as well as the words “Uniform Invoice Seal.” The consistent serial number thereon shall be engraved in Arabic numerals using standard No. 5 font size in boldface.

Electronic invoices must be logged with the MoF Platform with the appropriate eGUI number no later than 48 hours after the transaction.

When Business entities sell goods or services and issues and transmit electronic uniform invoices, they have to upload the information of uniform invoices to the E-Invoice Platform of the Ministry of Finance.

eGUI numbers must be requested for every bi-monthly reporting period(bi-monthly tax report must match e-invoices sent via Platform).

The process of reporting

There are two ways of invoices reporting:

1. Via value-added service centers - resident organizations certified by Taiwan’s Ministry of Finance as intermediaries between the non-resident companies and Taiwanese customers. Non-resident businesses can’t integrate directly with Taiwan’s Ministry of Finance system, but only Taiwan-based businesses. At this moment, there are 183 companies certified as value-added centers, all based in Taiwan.
2. Via Turnkey transmission - software for the pc which enables manual submission of invoices. Each invoice must be submitted manually, and there is no API connection.

A foreign enterprise, institution, group, or organization having no fixed place of business within the territory of the R.O.C. selling electronic services to domestic individuals shall be the taxpayer of the business tax(VAT).

Non-resident providers must register with the tax authorities directly or via a local tax agent.

A standard tax rate of 5% is applied.