Taiwan - Tax Registration Obligation for Natural Persons on Digital Platforms

The Taiwan Ministry of Finance (MoF) noticed that in recent years, many people have utilized social networks such as Facebook, Instagram, and Line to create fan pages, groups, and communities, post commercial ads, and arrange private meetings with consumers to deliver goods or offer services.

On July 24, 2024, the MoF announced that individuals using Line communication software and other social platforms to set up groups or fan groups for commercial activities should comply with the tax registration regulations.

Impact of the Announcement

Individuals who sell goods or services through the Internet for profit-making purposes and whose monthly sales exceed the tax threshold of TWD 80,000 for goods and TWD 40,000 for services should apply for tax registration.

However, if their monthly sales do not reach the turnover threshold, they are temporarily exempt from applying for tax registration with the State Administration of Taxation. Once they exceed the registration threshold, individuals should register for tax purposes by the end of the next month at the latest.

While researching, MoF discovered that individual X has offered tattoo and makeup teaching courses since January 2020. X arranges for consumers to visit specific locations through Line communication software and other methods, provides related services, and collects compensation. 

Based on the data gathered, MoF concluded that X committed tax evasion of TWD 1.63 million, including VAT and non-VAT taxes, and that a severe penalty should be imposed on that individual. 

Conclusion

With the emergence of the digital economy and the growth of online transactions, consumer habits have shifted, leading to the introduction of new products and transaction models. The MoF announcement is part of the Taiwanese government's adjustments to tackle tax evasion.

Individuals using social platforms now should pay close attention to the thresholds and check if and when they should register for tax purposes.

Source: Taiwanese Ministry of Finance