VATupdate

VAT Rates in Taiwan

Quick overview

Standard Rate Reduced Rate Other Rates
5% N/A 0%, Exempt

The local name for VAT in Taiwan is Value-added and non-value-added business tax.

There is basically 1 VAT rates in Taiwan, a Standard VAT rate of 5%

Recent developments

For more information about (recent) rate change developments in Taiwan, please click HERE.

Standard rate: 5%

This rate applies for all transactions that take place in Taiwan, unless an exception applies (such as a reduced rate, the zero rate or an exemption, or a reason to treat the transaction as outside scope of VAT).

The standard rate of VAT applies to all supplies of goods or services unless a specific measure provides for the zero rate or an exemption. Exempt supplies apply to both VAT and GBRT. Zero-rated supplies apply only to VAT.
The following are the GBRT rates:

  • 0.1% for traders in the agricultural wholesale market and small businesses supplying agricultural products
  • 1% for small businesses and other business entities that are excluded by the MOF from reporting their transactions
  • 1% for reinsurance premiums of insurance enterprises (5% for operations other than authorized core businesses)
  • 2% or 5% on the sale of services by local financial institutions (for banking and insurance companies: generally, 5%, except for certain transaction types; for the other financial institutions: 2% on their core business revenue and 5% on their noncore business revenue)
  • 2% or 5% on the purchase of services from foreign financial institutions
  • 15% for nightclubs or restaurants providing entertainment
  • 25% for saloons or tearooms, coffee shops and bars offering companionship (in nightclubs, customers can ask wait staff to sit aside, serve drinks, chat and sing karaoke)

Zero rate (0%)

Examples of goods and services taxable at 0%

  • Export of goods
  • Services related to exports
  • Services rendered in Taiwan but used outside Taiwan
  • Sales of goods or services to taxable persons in bonded areas for the buyers’ operations

Examples of exempt supplies of goods and services

The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.•

  • Certain essential and unprocessed foods
  • Sale of lands
  • Certain bonds and securities
  • Sales of fixed assets that are not regularly traded by certain business persons subject to GBRT

Source EY

A global VAT/GST rate overview can be found here (note this is a work in progress).

This post was last updated on August 30, 2021.

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