Taiwan VAT Late Filing Penalties Explained

The Southern District State Taxation Bureau of the Ministry of Finance in Taiwan released a public notice explaining the reporting rules for businesses applying for a suspension of their activities or those that did not generate any revenue during the reporting period. The notice emphasizes that even in these cases, any reporting violations will be penalized for late reporting.

Reporting Requirements and Penalties

The Ministry of Finance stated that, according to the Value-added and Non-value-added Business Tax Act, VAT returns must be filed within 15 days after the end of each two months, together with all necessary documents and information about any sales, tax payable, or overpaid tax. Failing to comply with these reporting rules will result in penalties.

If the tax return is submitted within 30 days after the 15-day deadline passes, a late fee of 1% of the due tax is charged every two days, with a minimum penalty of TWD 1,200 (around USD 41) and a maximum of TWD 12,000 (around USD 410). For late filing that exceeds the 30-day limit, a penalty of 30% of the due taxes is imposed, with a minimum penalty of TWD 3,000 (approximately USD 100) and a maximum of TWD 30,000 (around USD 1,030).

In cases when there are no due taxes but a taxable person files a late tax return, a penalty of TWD 1,200 is imposed if the return is submitted within 30 days from the due date. If a return is filed after the 30-day period from the due date, a penalty of TWD 3,000 is charged.

Conclusion

Businesses using uniform invoices must file VAT returns even if they did not make any sales during the reporting period or if they suspended their business activities. Failing to comply with these rules will inevitably result in penalties, which vary depending on how long the tax return submissions were late. Therefore, taxable persons should pay close attention to these requirements, as well as deadlines for tax return filing, to avoid any unnecessary penalties and compliance issues.

Source: Ministry of Finance