|VAT Rate on Digital Services||VAT on Cross-Border Electronically Supplied Services||Digital Reporting Requirements for Foreign Sellers Providing Electronically Supplied Services|
VAT on Cross-Border Digital Services in Taiwan
Taiwan introduced a business value-added tax (VAT) on digital services supplied by foreign companies to individuals in Taiwan in 2017. Supplies of digital services by foreign electronic service providers to domestic natural persons should be taxable at the standard VAT rate of 5%.
Foreign companies supplying digital services to Taiwanese consumers are expected to register and charge VAT on these supplies. End consumers are persons buying services who are not registered for VAT in Taiwan and are not identified by a valid VAT number.
Digital Services in Scope
Types of digital services that fall within this obligation include:
- Services that can be downloaded through the internet and saved on computer and/or mobile devices
- Services that can be used online without being downloaded (e.g. in digital forms, like online games, advertisements, audio-visual browsing, and voice frequency broadcasting)
- Services that are ordered online but delivered in a physical location (e.g. short-term accommodation, rental of transport services). For example, the services are supplied through the online digital platforms set up by the foreign entity and used at a physical location in Taiwan.
Determining the Location of the Taiwanese Consumer
The following should be taken into account as pieces of evidence establishing the customer’s location in the Republic of China (ROC):
- Purchaser uses a computer or mobile device for connecting to the internet which is installed in the ROC
- For buyers who use mobile devices to purchase electronic services, the country code of the mobile phone is 886
- Purchaser’s information such as billing address, bank account for payment, the IP address of equipment or devices
VAT Registration for Foreign Companies
Foreign companies should apply to register for VAT with the local tax authorities when the applicable thresholds are breached. Applications are processed by the local tax authorities.
- VAT registration threshold for non-resident suppliers of Digital Services: annual turnover exceeding TWD 480,000
- Fiscal representatives: Permitted, but not required. The non-resident taxable person can perform the registration procedure itself or the company can nominate a Tax Representative.
VAT Returns and payment of taxes
VAT returns for non-residents
|VAT Return Name||Business Value Added Tax Return|
|Filing Frequency||Bi-monthly, in exceptional cases monthly|
|Filing Deadline||By the 15th day of the following reporting period|
|Payment Deadline||Before the submission of the prescribed Return form|
|Payment Currency||New Taiwan Dollar (TWD)|
|Fiscal Representative||Permitted, but not mandatory|
|Input Tax Recovery||Allowed in specific circumstances|
|Record Storage||10 years|
Digital Reporting Requirements for Cross-Border Digital Services
Foreign providers of digital services to Taiwanese end consumers should issue cloud uniform invoices and report them to the E-Invoice Platform of the Ministry of Finance.
For more information about digital reporting requirements in Taiwan see E-invoicing and Digital Reporting Guide.