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Business Tax for a New Taiwan Subsidiary: 5% VAT, Bimonthly Returns, Zero-Rated Exports and E-Invoices
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Business Tax for a New Taiwan Subsidiary: 5% VAT, Bimonthly Returns, Zero-Rated Exports and E-Invoices

7 min read

What has to be in place on the Taiwan side before a new subsidiary issues its first invoice? For a company, usually very little. Article 28 of the Value-added and Non-value-added Business Tax Act requires the head office and every other fixed place of business to apply for tax registration (稅籍登記) before starting business. For a company, though, the tax office handles that registration from the data it receives from the company registration authority, and the company is treated as having applied (Regulations Governing Taxation Registration, Article 3, paragraph 2). One exception needs action. A company that sells online or through an app must add its domain name and similar details within 15 days of the tax office's approval.

Offices, warehouses or shops that deal with outside customers count as separate fixed places of business, and each registers before it opens (same article, paragraph 3). A foreign company's Taiwan branch is a business entity in its own right (Article 6, item 3). Each location in a different area files its own return unless a general-method business gets Ministry of Finance approval for the head office to file for all of them (Article 38).

A 5% tax on the difference

If your team's tax experience is mostly American, Taiwan's business tax (營業稅) may be the first VAT you have had to run. The mechanism fits in one line. The subsidiary adds tax to what it sells, pays tax on what it buys, and remits the gap.

The Act sets the band. Article 10 says the rate may be no lower than 5% and no higher than 10%, with the Executive Yuan fixing the rate actually charged. As of October 2026 the Ministry of Finance's eTax portal gives 5% for the general tax calculation method (Business tax guide, "課稅方式"). Output tax for the period minus input tax for the period is the amount payable; when input tax is larger, the result is an overpayment (Article 15, paragraph 1).

Here is how the arithmetic runs for a two-month period (an invented example). The subsidiary sells NT$1,000,000 of equipment to Taiwanese manufacturers and collects NT$50,000 of tax. It buys NT$600,000 of parts and services from local suppliers and pays NT$30,000 of tax. It remits NT$20,000.

Input tax only counts with the right paper. Under Article 33, the subsidiary needs a uniform invoice, or another voucher the Ministry of Finance has approved, that shows the tax and the subsidiary's own name, address and unified business number (統一編號). Some input tax is blocked outright. Article 19, paragraph 1 lists purchases without a proper voucher kept on file, purchases not used in the business or its ancillary activities, entertainment, rewards given to individual employees, and passenger cars for the company's own use.

Returns every two months, due on the 15th of odd months

Each return covers two months. It is filed even when there were no sales, within 15 days after the next period starts, and any tax due is paid to the treasury first, with the receipt attached to the return (Article 35, paragraph 1). The Enforcement Rules put the deadlines on the 15th of January, March, May, July, September and November (Article 38-1). So January–February is reported by March 15, and November–December by January 15 of the next year.

Late returns cost money. Within 30 days, a surcharge of 1% of the tax accrues for every 2 days of delay. Past 30 days it becomes 30% of the tax. Each charge has a floor and a cap (Article 49).

Exports and services used abroad: zero rate

Article 7 applies a zero rate to exported goods, to services related to exports or provided in Taiwan but used abroad, to sales to bonded-zone businesses for their operations, and to international transport, among other items. Zero output tax with full input tax tends to produce an overpayment. Overpayments caused by zero-rated sales are refunded after the tax office checks them (Article 39, paragraph 1, item 1). A business with zero-rated sales may also apply to file monthly. Once chosen, the period cannot change within the same year (Article 35, paragraph 2).

Proof depends on the transaction. Article 11 of the Enforcement Rules says goods exported through a customs declaration need no further document. Goods sent by post or express courier with an FOB value of NT$50,000 or less use a copy of the postal or courier receipt. For export-related services and services used abroad, the subsidiary keeps the foreign exchange certificate issued by a designated bank if the foreign currency was sold or deposited with such a bank. Otherwise it keeps a copy of the original foreign-currency receipt. Export sales of this kind may also be exempt from issuing a uniform invoice (Regulations Governing the Use of Uniform Invoices, Article 4, item 33).

Uniform invoices and the e-invoice upload clock

Unless an exemption applies, the tax office designates a business to use uniform invoices (統一發票) (Regulations, Article 3). Prices must include the tax. For a business buyer the invoice shows the sales amount and the tax separately; for a non-business buyer it shows the tax-inclusive price (Act, Article 32, paragraphs 2 and 3). As of October 2026, Article 7 of the Regulations still lists the paper triplicate invoice for business buyers and the duplicate invoice for individuals next to the e-invoice.

To start issuing e-invoices, a company applies to its local tax office for invoice number tracks (字軌號碼), estimating how many it will use each period, and draws numbers from the Ministry of Finance platform once approved (E-invoice implementation directions, point 7). Every e-invoice must then be uploaded to that platform (Act, Article 32-1).

How fast? The Ministry of Finance's time-limit table answers that. For a non-business buyer, such as an individual, the upload is due within 2 days counted from the day after the invoice is issued. For a business buyer, 7 days. Corrections, voids and return or allowance certificates run on the same clock. Weekends and holidays do not extend it.

Fines for late or inaccurate uploads sit in Article 48-2, in force since January 1, 2025. The tax office sets a deadline to correct and may impose NT$1,500 to NT$15,000. A business that misses that deadline, or corrects inaccurately, can be fined again for each instance (Taxation Administration release, December 18, 2024).

Services bought from abroad: the buyer reports

A Vietnamese software firm in Ho Chi Minh City runs the subsidiary's IT helpdesk under a monthly contract and has no office in Taiwan (an invented example). Who pays Taiwan business tax on its fees? Services provided or used in Taiwan are sales in Taiwan (Article 4, paragraph 2), and when the seller is a foreign entity with no fixed place of business here, the taxpayer is the buyer (Article 2, item 3). Article 36, paragraph 1 has the subsidiary apply the Article 10 rate to the amount paid and pay within 15 days after the start of the period following payment. The same logic covers a management fee charged by a US parent with no Taiwan office.

There is an exemption. A subsidiary that computes tax under the general method and uses the purchased services solely for its taxable business is exempt. One that also makes tax-exempt sales pays a proportion set by the Ministry of Finance. Where tax is due and remains unpaid 30 days past the deadline, Article 51, paragraph 1, item 6 allows a fine of up to five times the tax evaded and suspension of business, on top of collecting the tax (Article 51).

Withholding on the same payments is covered in Paying a US or Vietnamese Parent from Taiwan. Foreign sellers of apps or subscriptions to individuals in Taiwan have their own registration rules, explained in Selling Apps, Games or SaaS to Taiwan Without an Office. How Taiwan business tax is treated at home is a question for your US or Vietnamese tax adviser.

Hovering International Law Firm can look at how a subsidiary's sales split between taxable and zero-rated, or at the business tax side of an intercompany service agreement; write to wei@hoveringlaw.com.tw.

September–October sales and purchases go into the November return. Until then, each e-invoice to an individual must reach the platform within 2 days after the day of issue. Business invoices get 7.

Official sources

Sources checked October 6, 2026.

Frequently Asked Questions

Does a Taiwan subsidiary have to use e-invoices?
As of October 2026, Article 7 of the Regulations Governing the Use of Uniform Invoices lists paper triplicate and duplicate invoices alongside e-invoices. A company that issues e-invoices must upload them to the Ministry of Finance platform within 2 days after the day of issue for non-business buyers, individuals included, and 7 days for business buyers. Since January 1, 2025, a missed or inaccurate upload can draw a fine of NT$1,500 to NT$15,000. Whether a particular industry carries its own e-invoice duty is best confirmed with the local national taxation bureau.
Our US parent charges the subsidiary a management fee. Is Taiwan business tax due on it?
If the parent has no fixed place of business in Taiwan, the subsidiary as buyer calculates the tax on the amount paid and pays it within 15 days after the start of the period following payment, under Article 36, paragraph 1 of the Business Tax Act. A subsidiary that computes tax under the general method and uses the services solely for taxable sales is exempt from paying.
We mainly export, so our input tax is larger than our output tax. Do we get a refund?
Yes, for the excess caused by zero-rated sales. Article 39 of the Business Tax Act says the tax office refunds it after checking. Excess arising from buying fixed assets is also refunded, and any other excess is generally carried forward against tax payable in later periods.

This article provides general information and is not legal advice on any individual matter.

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