Sole Proprietorship Change of Responsible Person: Tax Implications on Asset Transfer

• When a sole proprietorship changes its responsible person, the original responsible person should issue a unified invoice and pay business tax when transferring inventory and fixed assets to the new responsible person.
• Even though the unified number remains unchanged, the transfer of inventory and fixed assets is considered a transfer of business rights and obligations.
• The transfer is considered a sale of goods, regardless of whether it is free of charge.
• The original responsible person should issue a unified invoice based on the transfer price and pay business tax.
• For example, if a sole proprietorship transfers its operating rights and assets worth 1 million NT dollars to a new responsible person, the original responsible person should issue a unified invoice with a sales amount of 1 million NT dollars and a tax amount of 50,000 NT dollars.
• Sole proprietorships should pay attention to relevant regulations to avoid penalties for failing to issue unified invoices.

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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