Issuing Uniform Invoices for Advance Payments (Taiwan VAT Requirement)
In accordance with Article 32 of the Value-Added and Non-Value-Added Business Tax Act and the “Time Limit Table for Issuing Sales Invoices,” businesses are required to issue Uniform Invoices based on the statutory timing. For trading businesses, the general rule is to issue invoices upon shipment or delivery. However, where payment is received prior to delivery, the applicable requirement differs and must be carefully observed.
Where any payment is collected before the delivery of goods, a Uniform Invoice must be issued immediately upon receipt of such payment, and the corresponding VAT must be duly reported. This requirement applies to all forms of advance collections, including deposits, prepayments, and partial payments.
It should be noted that this obligation arises directly from tax regulations and is not subject to internal discretion. Failure to issue invoices at the prescribed time may result in underreported VAT and potential tax exposure.
To mitigate compliance risk, businesses are encouraged to regularly review their transaction flows and confirm whether all advance payments have been properly invoiced in accordance with relevant regulations. Particular attention should be given to transactions involving staged payments, long delivery lead times, or customized orders.
If an omission is identified, voluntary correction and payment of the outstanding tax prior to any report or investigation by the tax authority may qualify for penalty relief under the Tax Collection Act. Nevertheless, statutory interest on the underpaid tax will remain applicable.
Timely compliance with invoice issuance requirements is a key component of effective tax governance and internal control.
