- Liquidated damages related to the sale of goods or services are subject to business tax and require an invoice.
- Late payment interest, as defined by civil law, is not subject to business tax and does not require an invoice.
- If “interest” is used to disguise sales income, it will still be taxed as part of the sales amount.
- Businesses that fail to issue invoices for taxable liquidated damages or compensation should proactively report and pay the tax to avoid penalties.
Source: mof.gov.tw
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.
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