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Companies Begin Paying Taiwan's New 'Netflix Tax'

by Mary Swire, Tax-News.com, Hong Kong

23 August 2017


Taiwan has said that a total of 45 overseas providers of electronic services have filed value-added tax returns in respect of electronic supplies to the domestic market, under the territory's new "Netflix tax."

On December 28, 2016, Taiwan's President Tsai Ing-wen signed into law an amendment to the Value-Added and Non-Value-Added Business Tax Act to impose tax on foreign online sellers' supplies to Taiwanese consumers. The amendment was intended to raise additional revenues and level the playing field for Taiwanese "bricks-and-mortar" retail and service businesses.

Under the amended legislation, foreign online suppliers selling cross-border goods and electronic services to end consumers must register for tax in Taiwan through a permanent establishment, or appoint a VAT or non-VAT tax representative. The permanent establishment or agent is required to file the necessary bimonthly tax returns. Significant penalties exist for non-compliance.

The National Taxation Bureau said 45 offshore electronic services business entities have filed their first business tax return for the May-June 2017 interval (including 43 entities filing with tax payable and 2 entities with no tax payable), and the total amount of tax payable is over NTD422m (USD14m).

TAGS: compliance | tax | business | value added tax (VAT) | law | Taiwan | offshore | legislation | penalties | retail | services | Tax | BEPS

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