Taiwan to introduce tax on digital service supplies

Tue Aug 23, 2016

Last week Taiwan’s Ministry of Finance (MOF) held a meeting with some of the world’s most successful digital companies to inform them of new plans to tax their cross-border sales.

Taiwan digital tax

This move by Taiwan will require companies such as Apple, booking.com, Uber, et al to register with Taiwan’s tax authority and to remit tax on their cross-border supplies to Taiwan-based consumers.

Sound familiar? Of course it does, this is a course of action that a rapidly increasing number of tax authorities are turning to in an attempt to “level the playing field” between domestic and international digital service suppliers.

The Taiwanese tax authorities sought the high-level August meeting with affected digital service suppliers to inform them of their impending tax liabilities.

In a global tax alert the multinational professional services firm Ernst and Young have stated that a draft amendment to Taiwan’s Business Tax Act will be issued by the end of September 2016. The new amendment is expected to take effect as early as 2017 with a rate of 5% being mooted.

The Taiwan B2C eCommerce market has boomed in recent years. A recent survey – conducted by Accenture and Ali Research, and quoted by the Focus Taiwan news channel – revealed that sales from business-to-consumer (B2C) cross-border eCommerce activities could rise to US$1 trillion in 2020 from just US$230 billion in 2014.

Note: Taxamo content is created for guidance only, please consult your local tax advisor for professional advice.

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