Issuing GUI When Selling Mortgaged Property
To protect creditor rights, a creditor may auction or sell a debtor’s mortgaged property under the Movable Property Secured Transactions Act. If both parties issue GUIs, they must provide these to both the buyer and creditor as directed by the Ministry of Finance.
For example, Company A mortgaged machinery to Company B as loan collateral. After Company A defaulted, Company B sold the collateral to Company C for NTD30,000,000 (tax included) and issued an invoice to C. Company B then requested Company A to issue an invoice for the same amount, but A did not comply, resulting in underreported sales, additional taxes, and fines.
The Ministry of Finance reminds creditors to issue invoices to buyers and notify debtors to provide supporting documents. Voluntary issuance and tax payment before investigation can prevent penalties.
