- Businesses that handle overseas study and travel services on behalf of others should issue taxable unified invoices and pay business tax on the commission income received from foreign schools.
- According to the Taipei National Tax Bureau, businesses that handle overseas study and travel services on behalf of others and receive commission income from foreign schools fall under the category of domestic sales of services and should issue taxable unified invoices and pay business tax.
- Due to the easing of the pandemic, many students are planning to study or travel abroad and are using study and travel agencies to handle the relevant application procedures.
- When businesses handle overseas study and travel services on behalf of others, and students who have applied for study or travel go to foreign schools to complete registration and pay tuition fees, the foreign schools will pay commissions to the businesses.
- The provision and use of this service are both within the territory of the Republic of China, and it is considered a domestic sales of services, not related to export services. Therefore, the zero tax rate specified in Article 7, Paragraph 2 of the Value-Added and Non-Value-Added Business Tax Act does not apply. Businesses should issue taxable unified invoices and pay business tax.
- As an example, if Business A handles study services for Student A at Overseas School J, and after Student A completes registration and pays tuition fees to School J, School J pays Business A a commission of NT$10,000, Business A should issue a taxable unified invoice and pay business tax on this commission.
- The tax bureau reminds businesses that if they mistakenly report business tax based on the zero tax rate on the sales amount when they receive commission income from foreign schools for handling overseas study and travel services, they should promptly rectify the situation and pay the correct amount of business tax in accordance with the law to avoid penalties before being investigated by the tax authorities or designated investigators appointed by the Ministry of Finance.
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.