Issue invoices in Taiwan: The rules to abide by
Issuing a special Government Uniform Invoice is mandatory for taxpayers upon supply or, if applicable, upon cash advance, whichever occurs first.
VAT invoices must contain the following details:
- Supplier and customer’s name, including trading name, and address
- VAT numbers of both the supplier and customer
- Invoice date
- Description of taxable supplies, including quantities and weights
- Taxable amount, added VAT, and gross amount
- For foreign currency invoices, the applied FX rate should be included.
Issue invoices in Taiwan: When a company needs to issue one
Goods are considered sold when ownership is transferred for compensation, while services involve providing services or offering goods for use in exchange for compensation. Notably, professional services by individuals like lawyers or accountants and salaried employment services are excluded.
The company is deemed to be selling goods under the following circumstances:
- The company uses goods it manufactured, imported, or purchased for its own purposes or transfers them without compensation.
- Remaining goods, when the company dissolves or ceases operations, are used to settle debts or are distributed to shareholders or investors.
- Goods purchased on behalf of others and delivered to the client constitute a sale.
- The company engages in consignment sales by entrusting others to sell goods.
- Consignment goods sold by the company also fall under the category of selling goods.
Issue invoices in Taiwan: Furnishing sales invoices
In the trading and manufacturing industries, a company is required to issue a unified invoice at the earlier of goods shipping or when payment is received in advance. For service-oriented businesses agreeing to complete a specified amount of work, the issuance is tied to the receipt of payment.
In exchange transactions involving goods or services, a unified invoice must be issued at the moment of the exchange.
For companies issuing coupons:
- Gift coupons, redeemable for specific goods, necessitate the issuance of a unified invoice upon sale.
- Discount coupons, applicable for discounted goods purchases, require a unified invoice at the time of the actual purchase.
Issue invoices in Taiwan: Are unified invoices required for compensation derived from business activities between companies?
Certainly. In Taiwan, the sale of goods, provision of services, and importation of goods are subject to business tax as per regulations. The taxable sales amount encompasses the entire consideration received by the company for the goods or services, encompassing all associated fees.
Issue invoices in Taiwan: Are there consequences for a company if it fails to issue or under-issues unified invoices?
In the event that a company neglects to issue unified invoices or understates the sales amount on such invoices and is investigated by the tax authority before the statutory reporting deadline, it is obligated to pay taxes calculated at the prescribed rate on the underreported sales.
Additionally, the company may face a fine of up to five times the tax-payable amount. However, the imposed penalty is capped at NT$1 million. If such infractions occur three times within a year, the company may face business suspension.
Where does Premia TNC come into the picture?
At Premia TNC, we understand the complexities of taxation in Taiwan and strive to provide comprehensive services to meet your financial needs. Our dedicated team is here to assist you in navigating the intricacies of tax regulations and optimizing your financial strategy. Here’s how we can help:
Tax compliance and filings:
Ensure compliance with Taiwanese tax laws through accurate and timely filings. We handle all aspects of tax compliance, allowing you to focus on your core business activities.
Unified invoicing management:
Streamline your invoicing processes to meet regulatory requirements. We can guide you in issuing unified invoices and help you avoid penalties associated with non-compliance.
Tax planning and optimization:
Maximize your financial efficiency with strategic tax planning. Our experts analyze your business structure to identify opportunities for minimizing tax liabilities while staying within legal bounds.
Audit support:
In the event of a tax audit, we provide thorough support, ensuring that your records are in order and helping you navigate the audit process seamlessly.
Business advisory:
Receive personalized advice on tax implications for various business decisions. From expansions to mergers, we offer insights to help you make informed choices aligned with your financial goals.
At Premia TNC, we are committed to delivering tailored solutions that address your unique taxation challenges. Let us be your partner in achieving financial success while ensuring compliance with the tax laws of Taiwan.
FAQs
Q1: How do I format an invoice in Taiwan?
A1: Include seller and buyer details, a unique invoice number, issuance date, clear item descriptions, total amount with taxes, and currency used.
Q2: What is the VAT rate in Taiwan?
A2: The standard VAT rate is 5%. You need to verify the current rate and clearly indicate the VAT amount separately on the invoice.
Q3. Are electronic invoices accepted in Taiwan?
A3. Yes. Apply for approval, adhere to specific formats and encryption standards, and retain records. Businesses can choose paper or electronic invoices based on preferences and compliance.
