With the increasing popularity of online transactions in Taiwan, especially through platforms like Shopee, Facebook, and Instagram, individual sellers must stay up to date with tax regulations.
For individuals involved in online sales for profit, understanding how sales and tax amounts are determined is crucial.
As per the guidelines set by the Taiwan National Taxation Bureau, sellers reaching a monthly sales threshold of NTD 80,000 for goods or NTD 40,000 for services must promptly apply for tax registration.
For example:
Consider the case of Mr. Andy, a Shopee seller since January 1, 2023. For the first ten months, his monthly sales stayed below NTD 80,000, exempting him from immediate tax registration. However, in November, his sales crossed NTD 90,000, surpassing the business tax threshold. In such scenarios, individuals like Mr. Andy must apply for tax registration promptly with the National Taxation Bureau.
Business operators in the online sales domain must furnish comprehensive transaction details to the National Taxation Bureau for verification. As per the Business Tax Law, the tax collection agency adheres to the same standards for for-profit online transactions as it does for physical stores. The current tax standards for physical stores selling goods are outlined below:
Monthly sales below TWD 80,000 (threshold) are exempt from business tax.
Monthly sales exceeding TWD 80,000 but not reaching TWD 200,000 incur a 1% tax rate based on sales. This is levied quarterly by the National Taxation Bureau, with bills issued before the end of January, April, July, and October each year.
Monthly sales surpassing TWD 200,000 or businesses identified by the National Taxation Bureau as having the capacity to use unified invoices face a 5% tax rate. While relevant input tax can be deducted, these businesses must report sales to the National Taxation Bureau every two months and self-pay the business tax.
Understanding these tax regulations is essential for online sellers in Taiwan to ensure compliance and avoid penalties.
Do you have questions or need help managing your business's bookkeeping and accounting? Contact us, a bilingual tax expert specializing in helping foreigners in Taiwan, to get tailored assistance!
At Del Sol CPA Services, we offer personalized consultations to understand your needs and provide the best solution.
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