Taiwan’s uniform invoice regulations require action by foreign e-commerce operators

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EY Global
29 Jan 2019 PDF
Subject Tax Alert
Categories VAT, GST and Sales Tax
Jurisdictions Taiwan, Province of China

Executive summary

Following the enactment of Taiwan’s Tax Ruling No. 106005495201 requiring the Value Added Tax (VAT) registration and VAT filing obligations for foreign enterprises, institutions, groups or organizations without a fixed place of business in Taiwan (referred to as foreign e-commerce operators, FECOs) when providing e-commerce services to domestic individuals,2 Taiwan’s Ministry of Finance (the MOF) issued two additional tax rulings3 announcing the relevant government uniform invoice (GUI) regulations.

FECOs that sell e-commerce services to domestic individuals (domestic purchasers) are subject to GUI regulations beginning in 2019.

Detailed discussion

Overview of the Tax Rulings

Type of GUIs for e-commerce services

FECOs should issue cloud GUIs to domestic purchasers. The cloud GUIs are defined as electronic GUIs and issued by business entities to domestic purchasers through means, such as email and phone that are approved by the MOF.

Issuance of cloud GUIs
  • The regulations are effective for transactions occurring on or after 1 January 2019.
  • Penalties may be waived on the failure of FECOs to issue cloud GUIs to domestic purchasers for the period from 1 January 2019 to 31 December 2019, allowing FECOs additional time to implement the required procedures to adopt the cloud GUI regulations.
Failure to issue cloud GUIs penalties

Under the VAT Act and Tax Collection Act in Taiwan, FECOs that fail to issue cloud GUIs would be subject to a penalty of up to five times of the tax that should have been collected through the issuance of the cloud GUI. In addition, failure by FECOs to issue cloud GUIs more than three times in a 12-month period, beginning with the first failure, may result in closures of the FECOs’ businesses.

Procedures of the issuance of cloud GUIs

FECOs should choose one of the two manners to upload the cloud GUI data to the MOF’s platform – directly by FECOs or appointing Value-Added Centers.

Key issues for FECOs

FECOs will have to address the following with respect to GUIs:

  • Complying with the requirements in a correct and timely manner
  • Allowing sufficient time to set up the cloud GUI system, including an application for transmission software and cloud GUI number

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