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Taiwan VAT Guide (加值型營業稅)

Taiwan's VAT system (加值型營業稅) is notably simple — a standard rate of 5% applies to most goods and services. Small businesses with monthly revenue below TWD 80,000 may use a 1% rate. Filing is bi-monthly for most businesses. There are no multiple reduced rates as found in many other countries. All amounts in TWD.

Taiwan's 營業稅 (Business Tax) covers both the value-added system (加值型) for larger businesses and a gross-receipts system (非加值型) for small enterprises. It is administered by the Ministry of Finance (財政部) through regional tax offices (國稅局). For related guidance, see our Corporate Tax Guide → and Personal Tax Guide →.

VAT Rates (2026)

  • Standard rate — 5%: Applies to the vast majority of taxable goods and services. This is one of the lowest standard VAT rates globally. Examples include electronics, clothing, machinery, professional services, restaurant meals, construction, and consulting.
  • Small business rate — 1%: Businesses with average monthly revenue of TWD 80,000 or less may register as small business taxpayers (小規模營業人) and pay tax at 1% of gross revenue. These businesses are not entitled to input VAT credits. The rate is applied to total monthly turnover.
  • Exempt supplies: Certain goods and services are exempt from VAT, including land, insurance, financial services (lending, banking), educational services, and medical services. Exempt businesses cannot claim input VAT credits.
  • Zero-rated exports: Exports of goods and services are subject to 0% VAT, allowing full input VAT recovery. This includes goods shipped abroad, international transport, and services provided to foreign clients.

VAT Registration

  • Registration threshold: Businesses with monthly revenue exceeding TWD 80,000 must register for VAT (營業登記). For those with monthly revenue between TWD 80,000 and TWD 200,000, the tax office may impose a higher 1% rate with input credit restrictions.
  • Voluntary registration: Businesses below the threshold may register voluntarily to claim input VAT credits, which is beneficial if they have significant purchases relative to revenue.
  • Foreign businesses: Foreign e-commerce platforms selling to Taiwanese consumers must register and charge 5% VAT. Cross-border B2B services are subject to reverse-charge rules.

Filing and Payment

  • Filing frequency: Most businesses file bi-monthly (every two months) — periods ending in odd months (Jan/Feb, Mar/Apr, etc.). Returns are due by the 15th of the month following the end of the filing period.
  • Small business filing: Small businesses on the 1% rate file quarterly and are usually assessed by the tax office rather than self-reporting detailed invoices.
  • Input VAT recovery: Registered businesses can credit input VAT (VAT paid on purchases) against output VAT (VAT collected on sales). Excess credits are generally refundable or carried forward.
  • Penalties: Late filing attracts a surcharge of 1% of the tax due per month (up to 15%). Late payment accrues interest at approximately 1% per month.

Uniform Invoices (統一發票)

  • Taiwan uses a uniform invoice (統一發票) system — all registered businesses must issue government-printed or authorised serial-numbered invoices for every sale.
  • Uniform invoices double as a receipt lottery (統一發票兌獎) — consumers can win prizes from TWD 200 to TWD 10 million by matching invoice numbers drawn bi-monthly. This incentivises customers to request invoices, improving tax compliance.
  • Electronic uniform invoices (電子發票) are now standard, integrated with the Ministry of Finance platform for automatic filing.