Business VAT Act changes: streamline tax reporting; e-invoicing deadlines; fines; VAT deductions; VAT lottery
A number of changes have been made to the Taiwanese VAT Act last month. These include:
- mandatory transmission of GUI e-invoices and related data to the state’s e-invoice platform within a specified time to the governments Integrated Service Platform:
- 7 days B2B e-invoices; and
- 2 days for B2C e-invoices.
- This aims to ensure that buyers can correctly deduct input tax and easily access e-invoice details via the platform or a lottery app. The platform also maintains the accuracy of the unified invoice lottery database, which lists winning invoice numbers, details of the issuer, and prize amounts ranging from TW$ 200 to TW$ 10 million.
- The Ministry of Finance’s e-invoicing platform has undergone a number of improvements to help certified accountants use and submit for reporting.
- Non-compliance with the e-invoice submission requirements will result in fines between TW$ 1,500 and TW$ 15,000, with cumulative fines imposed for failure to correct errors promptly. Additionally, late payment fees for overdue taxes will be calculated according to interest rates specified in the Tax Collection Act, reverting to previously established practices.
Taiwan dual VAT system
Taiwan’s VAT system applies to the sale of goods, services, and imports. Businesses charge VAT on their sales (output tax) and can deduct VAT paid on purchases (input tax). If input tax exceeds output tax, businesses can claim a refund. The non-VAT (special business tax or BT) system is an alternative tax mechanism, used in specific industries such as banking, insurance, or small businesses. Here, tax is calculated directly on gross business receipts rather than on the value-added principle. Both systems aim to ensure tax compliance across different sectors while adjusting for industry-specific needs.
The above amendments aim to protect consumer rights, simplify tax procedures for businesses, and improve the efficiency of tax administration through increased use of the MOF’s e-invoice platform. These changes reflect Taiwan’s ongoing efforts to modernize its tax system and encourage the use of electronic invoices.
