Taiwan's VAT On Online Retailers Becomes Law

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

02 January 2017

On December 28, Taiwan's President Tsai Ing-wen signed into law the 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 is intended to raise additional revenues and level the playing field for Taiwanese bricks-and-mortar retail and service businesses.

The Ministry of Finance is to draw up the required tax regulations and procedures. In addition, it is to establish a website for simplified business registration and for filing VAT returns and paying VAT.

Foreign online suppliers selling cross-border goods and electronic services to end consumers will have to register for tax in Taiwan through a permanent establishment, or appoint a VAT or non-VAT tax representative. The permanent establishment or agent will be required to file the necessary bimonthly tax returns. Significant penalties will be imposed for non-compliance.

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