New reporting guidance for non-resident providers of digital and electronic services
The Ministry of Finance has issued new details of filing and reporting guidance for offshore suppliers of digital services. The new clarifications include:
- Definitions on non-resident providers included in VAT obligations
- VAT and income tax obligations
- Cloud invoice obligations
- Tax implications for business taxpayers who buy from non-residents
2017 introduction of VAT on digital services
Taiwan implemented Value Added Tax obligations on non-resident providers and marketplaces for electronic or digital services from 1 May 2017. There is a NTD 480,000 VAT registration threshold for simplified registration, and no requirement to appoint a local Fiscal Representative. Taiwan imposes Government Uniform Invoices (GUI) e-invoice requirements on foreign digital services vendors since January 2020.
The current VAT rate in Taiwan is 5%. Follow VAT Calc’s global VAT and GST on digital services tracker for live updates on worldwide reforms.
What digital services are liable to Taiwan VAT?
Income from the following digital services is liable to VAT:
- Electronically supplies services steamed or downloaded onto computers and mobile devices
- Streaming or download media
- SaaS or cloud-based software
- Hosting and domain name services
Determining if Taiwanese VAT is due
Any provider or marketplace must determine if the place of supply is Taiwan under the destination principle. To demonstrate this, providers may rely of the following evidence:
- Mobile phone country code
- Billing address
- Bank account address
- SIM card
- IP address
Foreign e-commerce operator registration and compliance
Non-residents over the VAT registration threshold of NTD 480,000 must register with the Ministry of Finance online via the eTax portal. This includes if the provider anticipates going over this threshold in the next twelve months. This is a simplified registration process, ‘e-commerce operation registration’. There is no obligation to appoint a local VAT agent, but it remains an option.
Electronic VAT returns are then due on a bi-monthly basis. They are due, along with VAT payments, by the 15th of the month following the reporting period.
Electronic platform VAT obligations
Any non-resident electronic platform or similar intermediary selling the service on behalf of a provider will take on the VAT obligations. This will oblige them to follow the e-commerce operation registration process and file VAT return.
Asia Pacific VAT on digital services
|Comments (click for details)||Rate||Date||Threshold||Comments|
|Australia||10%||Jul 2017||AUD $75,000|
|Armenia||20%||Jan 2022||AMD 115million|
|Bangladesh||5% - 15%||Jul 2019||–||B2B and B2C|
|Bhutan||7%||Jul 2021||Nu 5million|
|Cambodia||10%||Mar 2022||KHR 250m|
|China||6%-13%||N/a||Nil||Withholding VAT; B2B and B2C|
|Indonesia||11%||Aug 2020||IDR600m or 12k customers|
|Japan||10%||Oct 2015||JPY 10 million|
|Laos||7%||Feb 2022||LAK 400m|
|Nepal||13%||Jul 2022||Rupees 2m||Also 2% DST|
|New Zealand||15%||Oct 2016||NZD 60,000|
|Pakistan||2%||Sep 2021||Nil||Marketplace Withholding VAT|
|Philippines||12%||Jul 2023 ?||P 3million|
|Singapore||7%||Jan 2020||S$ 100,000|
|South Korea||10%||Jul 2015||Nil|
|Taiwan||5%||May 2017||NTD 480,000|
|Thailand||7%||Sep 2021||1.8m Baht|