Taiwan's New Individual Online Goods Sales Policy in 2025
The current business tax thresholds for sales of goods and services in Taiwan are TWD 80,000 per month for goods and TWD 40,000 per month for services. These thresholds are anticipated to increase to TWD 100,000 and TWD 50,000, respectively, following revisions to the relevant regulations. The updated regulations are expected to be previewed at the end of October 2024, with implementation scheduled for January 1, 2025. Consequently, starting 2025, small businesses will be exempt from paying business tax provided that their monthly turnover remains below TWD 100,000 for goods and TWD 50,000 for services.
If the individual online seller conducts transactions for profit by purchasing and selling goods, the “average” total sales volume over the previous six months was previously used to determine whether the treshold for tax registration was reached. However, recognizing the increasing frequency of online transactions in recent years, Taiwan’s Ministry of Finance has revised this approach. Beginning January 1, 2025, online sellers will be required to register for tax purposes only if their sales of goods exceed TWD 100,000 or if their sales of services exceed TWD 50,000.
Taiwan’s Ministry of Finance, considering principles of fairness and evolving online transaction practices, issued Taiwan Finance and Taxation Order No. 10904512340 on January 31,2020. According to this order, individuals who sell goods or services online for profit and whose monthly sales remain below the business tax threshold may be temporarily exempted from registering with the Taiwan Internal Revenue Service.
Online transactions generally fall into three main categories:
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Selling second-hand goods for personal non-profit purposes: individuals who sell personal items such as clothing and household furniture are exempt from tax, as these sales are for non-profit purposes. Consequently, not all online seller transactions are subject to tax reporting.
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Non-recurring online sales: when individuals sell goods online on a non-recurring basis, such as occasionally selling self-made handcrafts, this activity is classified as temporary trade income. The profit is calculated using a net profit rate of 6% and is included in the individual’s comprehensive income tax.
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Profit-oriented online sales and auctions: individuals conducting profit-oriented online transactions, such as frequent online auctions involving the purchase and sale of goods are required to report and pay taxes on their income. Tax obligations are structured in three tiers, based on monthly sales volumes, with thresholds at TWD 100,000 and TWD 200,000.
Individuals who fail to apply for tax registration as required by regulations may face fines of up to TWD 30,000. Those conducting business without the necessary tax registration may be subject to a penalty of up to five times the evaded tax amount, in addition to the recovery of the unpaid tax. Furthermore, their business operations may be suspended.
In summary, the tax implications for online transactions in Taiwan are as follows:
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Threshold
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Business
tax regulations
|
Income
tax regulations
|
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Non-profit purpose
|
Personal sale of second-hand clothing and furniture for daily
household use
|
Registration: no tax registration required
|
Tax free
|
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Infrequent online sales (ex: selling self-made crafts online on an
occasional basis)
|
Registration: no tax registration required
|
An income from temporary trading, the profit
income should be calculated at a net profit rate of 6% and incorporated into
the calculation of personal comprehensive income tax.
|
|
For profit purpose
|
Monthly sales
under TWD 100,000 for goods; under TWD 50,000 for service
(effective January 1, 2025, threshold to be raised)
|
Registration: no tax registration required
|
Incorporated into the calculation of personal
comprehensive income tax.
With accounts: annual income minus related costs and expenses in the income.
Unaccounted: annual income, calculated based on the expanded book review net
profit rate.
|
|
Monthly sales between TWD 100,000 and TWD 200,000 for
goods; between TWD 50,000 and TWD 200,000 for services (effective January 1,
2025, threshold to be raised)*
*These thresholds apply to small-scale business
operators.
|
Registration:
register for tax registration at your place of residence.
Tax rate: 1%
Declaration method: The National Taxation Bureau
will proactively issue documents and collect taxes.
|
Incorporated into the calculation of personal
comprehensive income tax.
With accounts: annual income minus related costs and expenses is the income.
Unaccounted: annual income, calculated based on the expanded book review net
profit rate.
|
|
Monthly sales over TWD 200,000 for goods and
services
|
Registration:
register for tax registration at your place of residence.
Tax rate: 5% and
need to issue Government Unified Invoice (GUI) in accordance with the law.
Declaration method: declare business tax by
yourself every two months.
|
There are different requirements for income
tax returns depending on whether the business type is a sole proprietorship,
a partnership or a company.
Company:
it belongs to “company” income, and the business tax rate is 20%.
Sole proprietorship partnership: pre-tax profits and losses are incorporated
into the calculation of personal comprehensive income tax.
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KNOWLEDGE
