Business operators shall issue uniform invoices and pay the business tax in accordance with the regulations when collecting the franchise fee

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The National Taxation Bureau of Taipei of the Ministry of Finance stated that the collection of franchise fees from franchise owners by business operators is an act of selling goods or labor services. According to the law, business operators should issue uniform invoices to franchise owners and report and pay the business tax.
　　The Bureau explained that many business operators such as gourmet snacks or hand-shaken beverage shops had adopted open franchise methods to expand customer sources and enhance brand awareness. Business operators collect the franchise fee from each franchise owner, including fees charged for providing sales consulting services, raw materials or machinery, and equipment. All of the above involve the sale of goods or labor services, and the operator should issue a uniform invoice and pay the business tax in accordance with regulations. 
　　To explain the issue, the Bureau offers the example of Company A, which operates gourmet snacks and offers franchising relationships. After investigation, the Bureau found that the owner has collected franchise fees from dozens of franchisers totaling more than NTD 10 million. Also, Company A has not issued uniform invoices to the franchise owners as required by law. In addition to levying a business tax of more than NTD 700,000 on Company A’s underreported sales, the Bureau will issue a penalty in accordance with Subparagraph 3, Paragraph 1, Article 51 of the Value-added and Non-value-added Business Tax Act, or Article 44 of the Tax Collection Act, whichever penalty is more severe shall apply.
　　The Bureau would like to remind business operators that collect franchise fees from franchisees that if they fail to issue uniform invoices or pay business tax, they may voluntarily report and file the tax to the tax collection authority before investigation by the tax collection authority or an investigator designated by the Ministry of Finance according to Article 48-1 of the Tax Collection Act to be remitted from punishment with the supplementary payment of interest on tax due. If business operators have any questions, they can inquire with the nearest branch of the National Taxation Bureau or the tax collection branch, or call the toll-free service number 0800-000-321 for consultation, and a dedicated person will serve you wholeheartedly.
(Contact person: Assessor Huang of the third Examination Division; 
Telephone 2311-3711, ext. 1765)

Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=19f7b619c78d488da53d779c48ef6be8