The Ministry of Finance on Thursday said it would next week announce plans to levy corporate income taxes on cross-border e-commerce operators in a bid to close loopholes that have allowed international e-commerce firms to evade taxes.
The plan is aimed at multinationals without physical outlets or offices in Taiwan, the ministry said in a statement.
International e-commerce operators often choose not to set up physical branches in overseas markets, but instead run their businesses on digital platforms, which enable them to dodge taxes.
Profits generated by foreign e-commerce companies, which sell services via the Internet or other electronic devices to Taiwanese consumers with the help of local enterprises or residents, should be subject to corporate income tax, the statement said.
The corporate income tax rate for this type of cross-border e-commerce company should be 20 percent, it said.
The levy is to take effect in May and income generated by such transactions this year should also be subject to the levy, it said.
The move marks another step toward preventing tax avoidance, after the ministry earlier this year began imposing a 5 percent business tax on cross-border transactions by e-commerce companies.
Foreign companies supplying e-commerce services to Taiwanese customers with annual sales of at least NT$480,000 are starting in May to be required to apply for business registration certificates and pay business taxes directly or indirectly, regardless of where they are based.
In December last year, the legislature passed an amendment to the Value-Added and Non-Value-Added Business Tax Act (加值型及非加值型營業稅法修正案) that requires international e-commerce operators to register their presence with the tax authorities or face a fine of up to NT$30,000.
The amendments are in line with the OECD’s base erosion and profit-shifting scheme, which aims to prevent tax avoidance by multinationals and resolve cross-border tax disputes.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
RSS