Sale to Diplomats: Issue Zero-Tax-Rate Invoices
For personnel with diplomatic privileges, such as embassy officials stationed in Taiwan, the Ministry of Foreign Affairs can issue business tax exemption cards. The tax authority states that when businesses sell goods or services to such individuals, they are exempt from business tax but must still issue zero-tax-rate GUI to the buyer.
The tax exemption card is based on the principle of reciprocity, agreed upon between Taiwan and other countries for diplomatic personnel stationed in each other’s territories, to grant tax-free treatment.
When businesses sell goods or services to diplomatic institutions in Taiwan or their personnel holding the tax exemption card, the amount should be calculated based on the price of taxable goods or services minus the business tax.
For example, if the set price of taxable goods is NTD1,050, the included business tax of NTD50 should be deducted, making NTD1,000 the sales amount. The invoice should be marked with a zero-tax rate, the “Buyer’s Name” field should specify the name of the diplomatic institution or personnel in Taiwan, and the “Remarks” field should include the tax exemption card number.
