The Ministry of Finance should lay down guidelines to settle disputes over sales entities if it plans to impose business taxes on cross-border e-commerce activities, accounting firm Deloitte & Touche said yesterday.
The suggestion came as the ministry is drawing up a draft bill that would require cross-border e-commerce operators to register in Taiwan if their annual revenue reaches a taxable threshold.
Taxation authorities should provide details on which entities should bear the tax burden to avoid potential disputes between foreign commodity and labor providers, and online platforms, Deloittee Taiwan tax partner Susan Lee (李惠先) said.
Foreign e-commerce operators might argue that they only earn commission from selling goods or services on behalf of other firms, Lee said, adding that the firms could demand that the tax base be limited to commission values, not selling prices.
Tax officials have indicated they would respect contract terms between goods and service providers and online platforms.
Foreign hotel-booking agencies and game distribution platforms in particular have seen fast-growing sales in Taiwan, Lee said, adding that the UK has drawn up guidelines to settle potential disputes.
“Detailed guidelines are beneficial to tax revenue in Taiwan and would help companies that plan to enter the local market,” Lee said.
According to current rules, domestic operators must submit tax statements if their monthly commodity sales exceed NT$80,000 and their service charges surpass NT$40,000.
Foreign e-commerce operators have long been criticized for failing to pay taxes in Taiwan, even though they have earned significant revenue through digital platforms overseas.
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