29 Déc 2017 Taiwan weekly legal update: Draft regulation of the E-commerce taxation regime
Draft regulation of the E-commerce taxation regime.
Since the 1 May 2017, the cross-border E-commerce platform who offers services in Taiwan shall have taxation registration and declare business tax. The Ministry of Finance released the draft regulations about the taxation regime of the E-commerce; it is expected to take effect in the next year. The following are the brief introduction from the Ministry:
I. Sources of Income
There are two major kinds of E-commerce services, one is the “Platform services” and the other one is “non-platform services”. The Ministry has listed the sources of income:
A. Foreign E-commerce business provided the final products (software, E-books…), and provided the services for the customers to download to his personal devices through the Internet. Once the services required the participation of Taiwan companies or individuals, the income of the services would subject to taxation.
B. Foreign E-commerce business provides the services with the characteristics of instantaneous, interactive, convenient, and consistency (Online game, cinema, music, video, Advertising.) to the customer in Taiwan, the income would subject to taxation.
C. Foreign E-commerce business provides selling services for products in certain locations (hostel service, car renting services…). The income would not be subject to taxation regardless of using foreign E- platform, once the location of services or operations is outside of the border of Taiwan.
D. Foreign E-platform business provides transaction services for both cross-border buyers and sellers on the Internet. Either one of the parties is a Taiwanese national, business group or company, the income of the transaction would subject to taxation.
II. The base of tax collection
A. Deduction of cost
1. Those who can provide the accounting books and invoices, the deduction of the cost would accord to the data provided.
2. Those who cannot provide the accounting books and invoices, but can provide contracts, operation projects, transaction information in Taiwan… the deduction of the cost would accord to the “Profit Standard of the Same Trade Concerned”. For those who are classified as “E-platform services providers”, the deduction would be 30% of the profit.
B. Profit contribution
1. For those who can provide the complete transaction data which could be used as evidence to identify the profit contribution among on-shore and off-shore profit.
2. The process of the transaction and the services provided were wholly completed in Taiwan, would be deemed as 100% on-shore profit.
3. For conditions outside of 1 and 2, the on-shore profit contribution would be deemed as 50%. However, the taxation bureau could designate the contribution rate according to the investigation, in which the on-shore profits were suspected to have more than 50%.
For more information: https://www.ey.gov.tw/UnitRSS_Content.aspx?n=8092BD84714005C0&s=253098FB115910B3
Draft articles for “Tobacco Hazards Prevention Act”.
The FDA makes several draft amendment to the “Tobacco Hazards Prevention Act” which refers to the WHO Framework Convention on Tobacco Control. These are the major reforms of the draft articles.
1. Strict scrutiny of electronic cigarettes: due to the high risk of teens addicted to tobacco from starting to use E-cigarette, and its un-know ingredients. The FDA is prohibiting all the importing, selling, advertising and smoking of E-cigarette.
2. Prohibiting cigarette with flavor: no cigarette shall have add-on flavor, for preventing the teens from further addiction.
3. Packaging: the warning signs shall cover 85% of the whole package which makes reference to the worldwide policy of the “Single Presentation Requirement”.
4. No-Smoking areas: Nightclubs and pubs are the only indoor areas where smoking is allowed. Smoking is completely prohibited therein if no such smoking area is designated.
5. Prohibiting any kinds of “Tobacco sponsorship” on public welfares.
India is starting a global investigation on safeguard measures.
The Safeguard Measures Bureau under the Ministry of Finance of India announced that India Solar Manufacturer’s Association applied for a global safeguard measures investigation of solar cells and PV module.
The International Trade Bureau of Taiwan described that the investigation is going to focus on the products from China, Taiwan, Malaysia and Japan during 2014~2017(Sept.)
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