To follow the global trends and to balance the tax burden between domestic and foreign business entities, the new Value-added and Non-value-added Business Tax Act (the “BTA”) was revised in the end of 2016, and enacted on May 1st.
In the previous Taiwan BTA, foreign enterprises, institutions, groups, or organizations, without a fixed place of business in Taiwan, did not have to register as tax payers and pay the business tax. The business tax for the selling of electronic services in Taiwan was paid by the consumers. From May 1st, 2017, foreign enterprises, institutions, groups, or organizations, without a fixed place of business in Taiwan, shall register as tax payers to the competent authority, if they sell electronic services to domestic individuals, and their annual turnover exceed 480,000 NTD.
According to the draft articles of the implementation rules of the BTA, “electronic services” refers to services downloaded from the internet to PCs or mobile devices, services used solely on the internet, or other services acquired from the internet or by other electronic means. For example, it is deemed as selling electronic services to sell online games, apps, messenger stickers, e-books to domestic consumers.