How vat / sales tax works in Taiwan
Taiwan's business tax works as VAT at 5% on most domestic supplies, with output tax charged, input tax credited, and bi-monthly returns filed with e-invoicing evidence.
Small-scale sellers use a 1% deemed rate without input credits, financial institutions face special rates, and exports zero-rate with refunds.
Foreign e-service sellers to Taiwanese consumers register and remit locally, while B2B flows follow reverse-charge and agency mechanics.
Tax rates at a glance
- Business tax
- 5%
- Small-scale sellers
- 1%
- Exports
- 0%
- Financial institutions
- Special rates
- Individual line
- NTD 40,000
- Foreign e-services
- 5%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
E-commerce sellersSaaS foundersFreelancersExpatsCross-border traders
Watch out for
- The 5% headline hides special financial-institution rates and small-seller deemed treatment, so sector determines the real calculation.
- Individual sellers past NTD 40,000 monthly cross into registration and invoicing duties that casual traders rarely expect.
- E-invoicing is validity infrastructure rather than an option, with buyer credits depending on compliant issuance.
- Export zero-rating with refunds rewards documentation discipline, while misclassified domestic supplies create unrecoverable cost.
Frequently asked questions
What is the VAT rate in Taiwan?
Taiwan applies 5% business tax in 2026 on most supplies, with 1% deemed treatment for small-scale sellers, special financial rates, and zero-rating for exports.
Do individuals selling online charge business tax?
Past NTD 40,000 of monthly sales, individual sellers face registration and 5% obligations. Below that, casual activity stays outside the net.
Do foreign digital sellers register in Taiwan?
Yes for B2C e-services to Taiwanese consumers, with local registration and remittance. B2B supplies generally follow reverse-charge mechanics.