The National Taxation Bureau of the Northern Area, Ministry of Finance (NTBNA) states that foreign enterprises, institutions, groups, or organizations who have no fixed business place within the territory of the R.O.C. (hereinafter referred to as the foreign e-commerce business entities) and provides e-services to domestic individuals should complete taxation declaration and pay for the business tax starting from 1 May 2017, if the annual sales amount thereof exceeds NTD 480,000. Domestic business entities who purchase e-services from the foreign e-commerce business entities shall declare and pay the business tax in accordance with Article 36 of Value-added and Non-value-added Business Tax Act (hereinafter referred to as the Business Tax Act). 

    The NTBNA explained that, where an employee of a domestic business entity books a hotel through the foreign e-commerce platform for business trip, it should be considered as a purchase of foreign service by the domestic business entity. The said business entity shall therefore pay for the taxation, which will be calculated based on the total service fee within 15 days from the next period according to the prescribed rules. Where the said service is for the entity’s principal or ancillary business operations and the business entity engages in the sale of specific exempt goods or service as prescribed in Section 1 of Chapter 4 of the Business Tax Act, the business tax may be exempted by means of only declaring the total foreign service fee in field 74 of the Business Taxation Declaration Form. Those who engage in the sale of goods or services exempted from the business tax as prescribed in Paragraph 1 of Article 8 shall calculate and pay the business tax by using the non-deductible rate at the current period.

    The NTBNA would like to issue a reminder that the new business taxation system for foreign e-commerce business entities is restricted only to the sale of electronic services provided by the foreign e-commerce business entities to domestic individuals, who are deemed as the taxpayer of the business tax with obligations thereof, as prescribed in Article 2-1 of Business Tax Act. Domestic business entities, on the other hand, shall conduct a self-assessment and follow above rules when purchasing electronic services from the foreign e-commerce business entities. Those who fail to follow above rules shall proactively declare and pay for the said tax before being reported or under investigation by the taxation authority; if not, a penalty may be imposed thereon.

    If there are any questions, please call the toll-free number   0800-000321, or directly contact the regional national taxation bureaus, its branches or offices for further information.