e-Tax alert 87 - Taiwan: VAT Act Amendments passed by the Executive Yuan to include foreign e-commerce businesses

Taiwan: VAT Act Amendments passed by the Executive Yuan

In August this year, the Taiwan Ministry of Finance (MOF) officially announced that it will amend the Taiwan VAT regulations regarding foreign e-commerce providers and bring them into the VAT net. Pursuant to the proposed changes, foreign e-commerce enterprises outside Taiwan that sells online to Taiwan individuals will be required to register and pay VAT in Taiwan.


Further to the announcement, the MOF had draft the proposed changes to the VAT Act and submitted it to the Executive Yuan. The amended draft VAT lawchanges were passed by the Executive Yuan on September 22. The draft proposal of the amended VAT articles will be submitted to the Legislative Yuan for its review and approvals. Pending the outcome from the Legislative Yuan’s reviews, further changes / clarifications may arise.

The main changes to the draft VAT Act to capture foreign e-commerce enterprises into the Taiwan VAT realm are summarized below:

e-tax alert 87

KPMG Observations

Pursuant to the current draft proposal of amended VAT articles, there remain still a number of areas which require further clarification, such as the minimum VAT registration threshold, clearer definitions for foreign e-commerce enterprises and electronic services, requirement to issue government uniform invoices…etc. Additionally, based on the current proposed changes, there was no mentioning of any simplified registration or VAT filing regime, hence there would be an increase on the compliance requirements for foreign e-commerce businesses selling services to Taiwan individuals. Based on our prior experiences and comments given on the proposed VAT article amendments, we expect the MOF will provide further clarity in the subsequent issuance of detailed implementation rules and rulings. For businesses which could be affected should closely monitor the progress. KPMG will continue to monitor and track the developments on the VAT law amendments.

Vivia Huang
Partner, Tax department
Betty Lee
Director, Tax department


e-Tax alert

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