About Stamp Tax
Stamp tax is a type of documentary tax, meaning it is levied on specific documents. As long as a document is created within the territory of Taiwan, it is subject to stamp tax. There are many types of documents, such as contracts and receipts, but not every document requires stamp tax. The tax law lists specific documents that are subject to this tax. Common examples include paying stamp tax when signing a contract to buy a house.
The items that are currently subject to stamp tax include:
| Types of documents | Explanation |
| Monetary receipts | Referring to receipts, slip, release, bank book, payment record and the like issued to identify monetary payments. However, this does not apply to monetary receipts for commercial invoices or commercial invoices related to monetary receipts. |
| Deeds for sale of movable | Referring to deeds receipt issued for sale of movables. |
| Contracting agreements | Referring to agreements executed for the completion of a specifically ordered work or task, e.g., construction contracts, printing contracts, OEM contracts and the like. |
| Real estate sale, partition and transfer deeds | Referring to deeds or contracts for sale, gratuitous transfer, partition or exchange of real estate or pledge of lien on real estate to be submitted to government agencies for registration. |
When is Stamp Tax Required to Be Paid?
Documents subject to stamp tax must have the tax paid at the time the document is issued, delivered, or used. In other words, stamp tax must be paid as soon as the document is created.
For example, medical institutions are required to pay stamp tax when issuing receipts for out-of-pocket expenses. Therefore, when a clinic issues a receipt to a patient, a stamp tax label must be affixed to the receipt, representing the clinic’s payment of the stamp tax.
The post office issues stamp tax labels in various denominations, including NT$1, NT$3, NT$4, NT$5, NT$10, NT$12, NT$20, NT$50, NT$100, and NT$200. These can be purchased and affixed to documents as a form of stamp tax payment.
If the tax amount due is substantial and using tax stamps is inconvenient, we can apply to the local tax authority for a payment slip. For businesses or other organizations that need to affix tax stamps to a large number of documents, an application can be made to the local tax authority for periodic summary payments. Upon approval, payments can be made every two months as one period.
Calculation Method and Taxpayers for Stamp Tax
The stamp tax rate typically ranges from 0.1% to 0.4% of the document amount, though some cases involve a fixed amount. For example, the stamp tax on contracts for the sale of movable property is NT$12 per contract. The taxpayers responsible for paying the stamp tax are the parties who sign or issue the document.
| Types of documents | Tax Rate | Taxpayers |
| Monetary receipts | Affix tax stamp at 0.4% of the amount received, with the exception of 0.1% for money deposited by bidders. | A person who executes monetary receipts. |
| Dees for sale of movable | Affix tax stamps at NT$12 per piece. | An individual who carries out contracts for the sale of movable property. |
| Contracting agreements | Affix tax stamps at 0.1% of the contract price. | A person who executes contracting agreements. |
| Real estate sale, partition and transfer dee | Affix tax stamps at 0.1% of the contract price or value of the real estate. | An individual who executes contracts or agreements for the sale, free transfer, partition, or exchange of real estate, or establishes a pledge or lien. |
What Happens if You Fail to Pay Stamp Tax?
Failing to affix stamp tax labels or declare stamp tax is often seen as a matter of personal discretion because tax authorities are not immediately aware when a receipt is issued or a contract is signed. This makes it easy for tax evasion to occur.
However, if tax evasion is discovered or reported, penalties will be imposed. Therefore, it is essential to declare and cancel the stamp tax accurately. According to the Stamp Tax Act, if stamp tax is not paid, the following penalties may apply.
| Violations | Penalties |
| Failure to affix stamp tax labels or affixing insufficient amounts | In addition to paying the overdue tax, a fine of 5 to 15 times the amount of the missing stamp tax will be imposed. |
| Failure to cancel stamp tax labels after affixing them | For using uncanceled or improperly canceled stamp tax labels, a fine of 5 to 10 times the value of the labels will be imposed. |
| Continuing to use an expired document | In addition to paying the overdue tax, a fine of 5 to 15 times the amount of the missing stamp tax will be imposed. |
| Modifying an original document and continuing to use it without affixing additional stamp tax labels for the changes | In addition to paying the overdue tax, a fine of 5 to 15 times the amount of the missing stamp tax will be imposed. |
| Reusing a stamp tax label after it has been affixed and canceled | For reusing a canceled stamp tax label, a fine of 20 to 30 times the value of the reused label will be imposed. |
Conclusion
In summary, Taiwan’s stamp tax is a documentary tax applied to specific types of documents, and the tax rates range from 0.1% to 0.4% of the document’s value, with some documents subject to fixed amounts. Taxpayers can pay the stamp tax by affixing tax labels in various denominations or through alternative methods for larger sums or bulk documents. Compliance with stamp tax regulations is crucial, as failure to pay or improper payment can lead to substantial penalties. Understanding the types of documents subject to stamp tax, the applicable rates, and the payment methods helps ensure that individuals and businesses meet their obligations and avoid fines.
FAQs
What types of documents are subject to stamp tax in Taiwan?
The documents subject to stamp tax include:
• Monetary receipts: Receipts, slips, payment records, etc., for monetary payments, excluding commercial invoices.
• Deeds for sale of movable property: Receipts issued for the sale of movable items.
• Contracting agreements: Contracts for completing specific tasks, like construction or printing.
• Real estate sale, partition, and transfer deeds: Contracts or deeds for real estate transactions, such as sales, transfers, or pledges
How can stamp tax be paid?
Stamp tax can be paid by purchasing stamp tax labels from the post office, available in denominations ranging from NT$1 to NT$200. These labels are affixed to the relevant documents. For large amounts or businesses dealing with many documents, alternative payment methods, such as payment slips or periodic summary payments, can be arranged through the local tax authority.
Who is responsible for paying the stamp tax?
The person who signs or issues the document is responsible for paying the stamp tax. This includes individuals or entities involved in monetary receipts, sales of movable property, contracting agreements, and real estate transactions.
