The National Taxation Bureau said it would step up efforts to check tax reports from tourist hostels after it was recently discovered that several Hualien County hostels were allegedly violating regulations.
Tax regulations stipulate that hostels with less than five rooms, a total living area of less than 150m2 and no employees do not have to apply for a business license and do not have to issue unified invoices.
Hostels that do have a business licenses, but have a monthly income of less than NT$200,000, are subject to a business tax of 1 percent of their monthly income, but do not have to issue unified invoices, the bureau said.
Hualien’s beautiful scenery and rich Aboriginal culture has attracted a growing number of Chinese tourists. However, the influx of Chinese tourists has led to several local hostels expanding their businesses, exceeding the stipulated living area and monthly income limits that exempt them from having to issue invoices, the bureau said.
“We have started to identify these business owners and will help them through the processes of applying for business licenses, issuing unified invoices and filing proper business tax reports,” said a bureau official, who declined to be named.
Three out of the 57 hostels identified have started issuing unified invoices, while their tax filings have increased from NT$360,000 last year to NT$920,000 this year, a growth rate of 155 percent, the bureau said.
The bureau said that it would also look into complaints that increased cooperation among Chinese travel agencies with China-based Taobao.com’s subsidiary, Taobao Travels, is depriving local travel agencies of business.
Taobao Travels recently signed a contract with more than 3,000 Taiwanese hostels.
The bureau said that some travel expense records cannot be verified when Chinese tour groups are taken to shops and galleries that are run by Chinese or Hong Kong firms, saying that the money from items purchased by tourists in Taiwan is going into accounts in Hong Kong.
The Executive Yuan has instructed the Ministry of Economic Affairs to cooperate with the ministries of finance and transportation and communication, as well as the Fair Trade Commission, to address the matter.
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