Foreign e-commerce business entities that provide e-services to domestic natural persons with an annual sales amount exceeding NT$480,000 shall apply for taxation registration, issue uniform invoices,
The National Taxation Bureau of Taipei, Ministry of Finance expressed that foreign enterprises, institutions, groups, and organizations that had no permanent establishment within the territory of the R.O.C. and sells e-services to domestic natural persons are determined as business entities as prescribed in Paragraph 4, Article 6 of the Value-added and Non-value-added Business Tax Act (hereinafter referred to as foreign e-commerce business entities). Furthermore, the Bureau also stated that foreign e-commerce business entities with an annual sales exceeding the threshold should apply for taxation registration, issue uniform invoices, and file business tax returns with taxation authorities of our country.
The Bureau explained that, due to the prosperous development of domestic e-commerce industry, there are cases that some Taiwanese established profit-seeking businesses overseas and commissioned offshore internet service companies and offshore third-party payment service providers to set up online platforms and install e-service and payment systems, through which they could sell services to domestic and foreign consumers. When the said services are sold to foreign consumers, they are not subject to Business Tax. However, when the services are sold to natural persons within our country, which are subject to Business Tax regardless of whether the business entity is registered overseas and has no fixed place of business in our country, as per the rules. Foreign e-commerce business entities with an annual sales amount exceeding NT$480,000 are required to apply for taxation registration, issue uniform invoices, and file business tax returns with taxation authorities by themselves or by appointing a tax-filing agent.
The Bureau provided an example: A domestic individual established Company A overseas and commissioned an offshore internet service company (Company B) and an offshore third-party payment service provider (Company C) to set up an overseas online platform, through which domestic and foreign consumers can purchase online language courses using an electronic device such as a mobile phone, tablet, or PC. According to the Bureau’s investigation, the sales amount of language courses sold by Company A to domestic natural persons in 2020 was more than NT$60,000,000. However, Company A failed to apply for taxation registration as required by law, despite its annual sales amount already exceeding the threshold of NT$480,000. As a result, it was suspected of being involved in tax evasion and underreporting its sales amount. The Bureau therefore demanded that Company A make up the tax payment and imposed a fine for tax evasion. Company A complied by applying for tax registration, making up the payment and paying the fine accordingly.
The Bureau would like to remind citizens who establish businesses overseas to pay attention to the provision that foreign e-commerce business entities providing e-services to domestic natural persons with an annual sales amount exceeding NT$480,000 must apply for taxation registration, issue uniform invoices, and file business tax according to the law. Those who fail to do so may, according to Article 48-1 of the Tax Collection Act, voluntarily file a supplementary tax declaration with the tax collection authorities and make supplementary payment covering the tax amount not previously declared. This is allowed only if it is not the case brought by an informant or under investigation by appointed investigator either from the tax authorities or from the Ministry of Finance. By doing so, they can be only charged interest on the tax due and be relieved from any penalties that might be imposed. If there are any tax related questions, please contact district tax office or dial the free service hotline 0800-000-321 for more information.
(Contact person: Section Head Ms. Chen from Legal Affairs Division; Tel: 2311-3711 Ext. 2071)
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=78c2efb7778f42098f3c9427db4bda1f