Foreign e-commerce operators who sell electronic services to domestic natural persons should apply for tax registration in accordance with regulations

The Taipei National Taxation Bureau of the Ministry of Finance stated that overseas e-commerce operators who sell electronic services to domestic natural persons and whose annual sales exceed the annual sales base of NT$600,000 (the base will be raised from NT$480,000 to NT$600,000 starting April 7, 2015, and the regulations before the amendment will apply before that date) should apply for tax registration in accordance with regulations.

The bureau explained that foreign businesses, institutions, groups, and organizations that do not have fixed business locations within the country and sell electronic services to domestic natural persons via the Internet or other digital means are overseas e-commerce operators as defined in Article 6, Paragraph 4 of the Value-Added and Non-Value-Added Business Tax Act. If their annual sales exceed the annual sales basis for tax registration, they should apply for tax registration by themselves or entrust a tax filing agent to the Ministry of Finance Tax Portal/Overseas E-Commerce Taxation Zone/Business Tax Zone/Application for Tax Registration (website: https://www.etax.nat.gov.tw/etwmain/cbec-tax-area/business-tax ) and issue cloud invoices to pay business tax in accordance with regulations.

The bureau gave an example, saying that a foreign company A has no fixed place of business in Taiwan. Since 2014, it has used a self-built website to sell computer software. Its sales to domestic natural persons in that year were NT$400,000, which did not exceed the annual sales volume benchmark for tax registration and was therefore temporarily exempted from applying for tax registration. As Company A's business prospers, its sales from January to April 6, 2015 totaled NT$500,000, which has exceeded the annual sales benchmark for tax registration. It should immediately apply for tax registration at the Ministry of Finance's tax portal and issue cloud-based invoices to pay business tax in accordance with regulations.

The bureau calls on overseas e-commerce operators who have not applied for tax registration due to lack of knowledge of legal provisions and whose annual sales of electronic services to domestic natural persons have exceeded the annual sales benchmark for tax registration, to apply for tax registration at the Ministry of Finance's tax portal as soon as possible before being reported or investigated by tax collection agencies or investigators designated by the Ministry of Finance, and to automatically report and pay the unpaid taxes, which can be exempted from interest and penalties.

(Contact person: Sales Tax Section Chief Liao; Tel: 2311-3711 ext. 1850)