The Ministry of Finance clarified today (7th) that the definition of the portion of magazines exempt from business tax under Article 8, Paragraph 1, Subparagraph 9 of the Value-Added and Non-Value-Added Business Tax Act (referred to as the Business Tax Act) is as follows:
Physical magazines refer to publications with a fixed title, issued in numerical or chronological order, indicating the identity of the chief editor or publisher and the country of publication, with a publication period of more than 7 days but less than 1 year.
Electronic magazines refer to publications that meet the definition of physical magazines and are published and distributed in electronic form, authorized to provide reading services to purchasers, and transmitted via the internet, requiring a valid URL.
The Ministry of Finance explained that in response to the transaction model of providing electronic magazines through online platforms, the Ministry issued Order No. 10904685410 on June 2, 2020 (referred to as the June 2, 2020 Order), which stipulates that purchasers can permanently store electronic magazine files and be exempt from business tax in accordance with Article 8, Paragraph 1, Subparagraph 9 of the Business Tax Act. However, if purchasers can only read the magazine within a certain period of time and cannot download the electronic magazine file after the publication period or the termination of the contract, the exemption from business tax under the aforementioned provision does not apply.
Considering that the current definition of electronic magazines includes not only the digitized form of print magazines but also publications that are authorized for electronic reading at the time of publication, the Ministry of Culture has invited the National Library, experts and scholars, industry representatives, and the Ministry of Finance to redefine the scope of magazines. Therefore, based on the opinions of the Ministry of Culture, the Ministry of Finance reinterpreted the definition of magazines (including physical and electronic magazines), and repealed the provisions of the June 2, 2020 Order to keep up with the times.
The Ministry of Finance further explained that according to Circular No. 7560245 issued on August 20, 1986, and Circular No. 790148487 issued on May 16, 1990, if a business sells domestic magazines (periodicals) or sells or imports foreign magazines (periodicals) with permission from the competent government authority, they are both exempt from business tax. Therefore, if the magazines sold or imported by businesses meet the definition of magazines under the new Order, they can be exempt from business tax.
The Ministry of Finance stated that in accordance with the definition of the new Order, after a comprehensive review of relevant interpretations, Circular No. 0910450734 issued on January 24, 2002, Circular No. 10304603980 issued by the Taxation Department on September 30, 2014, and Circular No. 10304635160 issued on October 22, 2014, will all be repealed to facilitate the consistent implementation and collection of taxes by both tax authorities.
Source: mof.gov.tw
