Since 1 January 2020 foreign electronic service providers must issue cloud invoices, a type of e-invoice, for sales of electronic services to individual buyers in Taiwan. Alongside this, Taiwan’s local tax authorities have been introducing incentives for domestic taxpayers to implement e-invoicing despite this not being a mandatory requirement.
Before diving into the details of the e-invoicing system in Taiwan, we’ll discuss the Government Uniform Invoice (GUI), as the e-invoicing system is based on Government Uniform Invoices.
What is a Government Uniform Invoice (GUI)?
The government uniform invoice is a standard VAT invoice governed and pre-numbered by the tax authorities. All business entities must issue GUIs for all sales of goods and services subject to VAT, except for any legal exemptions.
Taxpayers can issue GUIs once their business registration has been approved by the local competent tax authority in Taiwan. Taxpayers can issue different types of GUIs, including paper-based GUIs and Electronic Government Uniform Invoices (eGUIs) as well. eGUIs are a type of GUI that are issued, transmitted, or obtained via the internet or other electronic means. As previously mentioned, issuing an eGUI is mandatory for foreign electronic service providers who sell electronic services to individuals in Taiwan as of 1 January 2020. However, issuing eGUIs is optional for the broader economy, including domestic taxpayers in Taiwan.
How are eGUIs issued?
As part of the eGUI issuance process, taxpayers are required to use the numbers provided by the tax authorities during the business registration process. An eGUI must comply with MIG 3.2.1 based on an XML format provided by the tax authority. Following the issuance of an electronic uniform invoice, the invoice information must be uploaded to the tax authority platform within 48 hours for B2C transactions and seven days for B2B transactions.
Foreign business entities within the scope of requirements or any entity that opts to issue eGUIs can appoint a third-party service provider called Value Adding Center to issue eGUIs. An alternative is implementing a solution based on the Turnkey transmission software provided by the Ministry of Finance.
Electronic invoicing has been encouraged by Taiwanese authorities for many years. As a result, more and more businesses have started to issue eGUIs. Also, the requirement to issue cloud invoices for foreign electronic service providers has played an important role in the widespread adoption of e-invoicing throughout the country. While it’s clear that Taiwan has come a long way in terms of the digitalization of e-invoicing processes, paper-based invoices can still be issued according to Taiwanese regulations. We’ll monitor developments in the future to see whether the mandatory implementation of e-invoicing will be extended to the broader economy in Taiwan.