Recognition of Sales Revenue Derived from Exported Goods Shall Be Based on Shipping Method
The National Taxation Bureau of the Southern Area, Ministry of Finance, indicated that the taxable year of the sales revenue derived from exported goods applied to income tax is different according to the shipping method. Profit-seeking enterprises should pay attention to tax related regulations to avoid mistakes when filing the annual income tax return.
The Bureau further stated that, in accordance with Article 15-2 of the Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax, the sales revenue of exported goods shall be recognized based on the fiscal year which includes the date of declaration listed on export declaration, if such goods are shipped out through Customs. On the other hand, the revenue shall be recognized in the fiscal year which includes the date stamped on the receipts provided by the post office or courier company, if those goods are sent out by express mails or parcels through land or air transport via post office or courier company.
For example, Company A exported goods worth US$100,000 under the trade term of C.I.F. (a.k.a. Cost, Insurance and Freight) and declared the goods to Customs on Dec. 28, 2020, when the exchange rate was 1:28.525. The goods arrived at the destination on Jan. 15, 2021, and the foreign exchange settlement amount was NT$2,838,000 on Feb 17, 2021. Because the date of declaration listed on export declaration form of Customs was in 2020, the sales revenue should be attributed to the year 2020 and recognized as NT$2,852,500 at the exchange rate on Dec. 28, 2020. The difference between NT$2,838,000 and NT$2,852,500, or NT$14,500, should be recorded as an exchange loss in the year 2021.
The Bureau would like to remind profit-seeking enterprises whose main business is exporting goods to pay more attention to the time point of the recognition of export revenue, and declare sales revenue in the correct fiscal year, so as to avoid being levied additional tax due to any omission or under-reporting of sales revenue.
Press Release contact: Mr. Chiang, First Examination Division
TEL: 06-2223111 ext 8019
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=72fbb2cae5404927b2e7688c3ed9a87d