Taiwan Sales Tax: Complete VAT Guide for SaaS

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Taiwan’s 5% value added tax (VAT) applies to most SaaS and digital services sold to consumers in the country. If you are a US-based SaaS business expanding into Taiwan, you need to understand how Taiwan’s “business tax” works. This includes when you need to register, and how to stay compliant with some of the strictest e-invoicing practices in the world.

This guide explains Taiwan's VAT rules for digital services. It covers VAT registration thresholds, filing deadlines, required e-invoicing, and how tools like Sphere can handle the paperwork. This lets your finance team focus on growth.

Is there Sales Tax in Taiwan?

Taiwan does not have a US-style sales tax. Instead, it has a value added tax (VAT) system officially called “business tax.” Business tax in Taiwan is governed by the Value-Added and Non-Value-Added Business Tax Act.

Taiwan’s standard VAT is a 5% tax rate, and that applies to most goods and services, including SaaS and digital products sold to consumers. Foreign companies selling into Taiwan must register for VAT once they exceed a certain sales threshold. Businesses must use electronic invoicing for every transaction. This is a uniquely strict requirement compared to most other countries in the world. 

Understanding Taiwan’s VAT System

VAT vs. Business Tax

Taiwan's business tax is a consumption tax charged at each stage of the supply chain. Businesses collect tax on their sales. Sometimes, they claim credits for tax paid on their purchases.

The standard rate is 5%, but Taiwan also has special rates for specific industries:

• 1% - Small-scale businesses under a simplified scheme
• 2% - Financial institutions and certain services
• 15% - Specific luxury goods
• 25% - Nightclubs and certain entertainment services

For most SaaS companies, the 5% standard rate is what matters.

Exemptions & Zero Rates

Certain goods and services are exempt from VAT and zero-rated in Taiwan.

Exempt Items in Taiwan

• Land sales
• Basic foodstuffs (rice, flour, salt, sugar, edible oils)
• Medical services
• Educational services
• Financial services (insurance, securities)

Zero-Rated Items in Taiwan

On these items, no VAT needs to be charged, but businesses also can’t recover any input VAT paid.

• Exports of goods and services
• International transportation
• Services provided to foreign clients that are used outside Taiwan

SaaS products sold to Taiwanese consumers are not exempt or zero-rated. SaaS in Taiwan is fully taxable at 5%.

Tourist VAT Refunds

Taiwan offers a VAT refund program for tourists who purchase goods and take them out of the country. To qualify, tourists must:

• Spend at least NT$2,000 in a single day at a Tax Refund Shopping (TRS) store
• Request a refund before departure at the airport or port
• Present receipts, passport, and purchased goods

Some stores offer in-store refunds through approved systems. This program doesn't apply to digital services or SaaS, but it's worth knowing about if your business also sells physical products in Taiwan.

VAT Registration Requirements in Taiwan

VAT Registration Requirements for Domestic Businesses in Taiwan

Any business operating in Taiwan, local or foreign with a physical presence, must register for VAT from the first day they make sales in the country. There is no economic threshold before registration is required. Domestic businesses must:

• Issue uniform invoices for all sales 
• File bimonthly (every two months) VAT returns
• File tax by the 15th of the month following the taxable period 

Foreign B2C E-Services

Foreign SaaS businesses selling directly into Taiwan must register for VAT once your sales exceed NT $600,000 per year (which is approximately $19,500 USD.) Note that this threshold increased from NT $480,000 in April 2025.

Registration is done through Taiwan's eTax portal under a special track for cross-border electronic services. This is called the Simplified Registration for Cross Border Electronic Services scheme.

Under this scheme your business:

• Cannot claim input VAT credits
• Is not required to have a local representative (though many businesses find this helpful)
• Must issue electronic invoices for every transaction
• Is required to file bimonthly (every other month) business tax (i.e. VAT) returns

Taiwan is one of the few countries that require foreign e-service providers to send electronic invoices directly to the government system. And it’s not just for intra-region sales, but for all cross-border consumer sales. This makes Taiwan one of the most administratively demanding VAT jurisdictions in the world.

Foreign B2B Services

If you're selling SaaS to Taiwanese businesses (not consumers), you typically don't need to register for VAT. Instead, the buyer applies the reverse charge mechanism and accounts for the VAT on their own return.

For example, say you invoice a Taiwanese company for your SaaS subscription, you don't add VAT to the invoice. The buyer in Taiwan reports the transaction and pays the VAT directly to the tax authorities. Your invoice should always note that the reverse charge applies.

Simplified vs. General Schemes

Taiwan offers two VAT registration schemes depending on your business model.

Simplified Registration for Cross-Border Electronic Services

This scheme is for foreign companies who sell digital services to consumers in Taiwan.

All businesses making at least NT $600,000 per year (approximately $19,500 USD) per year in sales to consumers in Taiwan must register with the country’s eTax portal. They must then collect VAT from buyers in Taiwan. Note that there are separate registrations for the Simplified and General VAT schemes, so be sure to choose the right one when registering.

It’s important to note that under this scheme, input tax recovery is not allowed. E-invoicing is mandatory. You must use cloud invoices through the Electronic Government Uniform Invoices (eGUI) system.

Foreign businesses using the simplified scheme must file business tax every two months. They must file by the 15th of the month after the reporting period. 

General VAT Scheme

The general VAT scheme in Taiwan is for businesses with physical presence or selling goods into Taiwan. 

Unlike with the Simplified scheme, there is no lower revenue threshold with this tax. Businesses are required to register and collect business tax/VAT from their first sale. Businesses must register with the country’s eTax portal (be sure to choose the registration for the General scheme rather than for the Simplified scheme.)

The registration process for this scheme is more complex. It requires documents like proof of incorporation and business address.

Unlike with the Simplified scheme, businesses registered under the General scheme are allowed to recover input VAT paid on purchases. But like with the Simplified scheme, e-invoicing using the cloud eGUI system is mandatory.

These businesses also file every two months on the 15th of the month following the reporting period.

Sales Tax on Digital Services (B2B vs. B2C)

In Taiwan, the taxability of your SaaS products depends on whether you are selling B2B or B2C.

If you're selling SaaS subscriptions to individual consumers in Taiwan, you must charge 5% VAT once you exceed the registration threshold. This includes items like streaming subscriptions (Netflix, Spotify, etc) and any personal software plans sold to individuals. 

B2B sales in Taiwan span business software sold to a business. If you’re selling to Taiwanese businesses, then you don’t charge VAT on your invoices. Instead, you send the e-invoice to your business customer, and they apply the reverse charge and account for the VAT in their own filings and payments.

Knowing your customer is key. Automation services like Sphere automatically determine whether a transaction is B2C or B2B and applies the correct tax treatment, so you don't have to manually categorize every sale

VAT Calculation & Invoicing for SaaS Companies

VAT Calculation Basics

Taiwan’s VAT rate is a straightforward 5% on all taxable transactions. 

If you’re selling a SaaS subscription for NT$1,000, you charge NT$50 in VAT, for a total of NT$1,050.

Input VAT recovery only applies if you are registered for VAT under the General scheme. If you are a foreign company registered under the Simplified VAT scheme then you are unable to claim input tax credits for VAT paid into the system.

Uniform Invoice Rules

Taiwan has a unique government uniform invoice (GUI) system. Every taxable sale must be documented with a uniform invoice issued through the government system. There are two types:

• Paper uniform invoices – Traditional receipts with government-printed numbers. 
• Electronic uniform invoices (eGUI/cloud invoices) – Digital invoices issued through the Taiwanese government’s e-invoicing system.  

Domestic businesses can choose between paper or electronic invoices. Foreign companies under the simplified scheme must use electronic cloud invoices.

Mandatory E-Invoicing for Non-Residents

If you're a foreign SaaS company registered under the simplified scheme, you are legally required to follow Taiwan’s tax rules. This includes issuing electronic invoices for every B2C transaction. 

Here’s what you need to know:

• Invoices must be issued within 48 working hours of the transaction
• You must use the government's eGUI (cloud invoice) system
• You need to be a registered and approved eGUI agent to submit invoices

Taiwan is unusual. It requires foreign companies to connect directly with the government invoicing system. Most countries only require this for domestic businesses or intra-regional sales (like within the EU).

Sphere has direct integration with Taiwan's eGUI system, so invoices are issued automatically and on time. No manual uploads or third-party agents needed.

VAT Filing & Compliance Process

Filing Frequency & Deadlines

Taiwan requires bimonthly VAT filing for both the simplified and general schemes. Returns (tax reporting) are due by the 15th day of the month following the end of each bimonthly period.

You must file even if you have no sales during the period. Taiwan requires a "nil return" to be submitted.

Some sources mention quarterly filing for the general scheme, but in practice, bimonthly is standard for most businesses.

Payment & Remittance

VAT payment is due on the same date as your return: the 15th of the month following the bimonthly period.

Payment with the amount of tax due must be made by wire transfer to the following:

• Bank – Bank of Taiwan, Cheng Chung Branch
• Beneficiary – National Taxation Bureau of Taipei, Ministry of Finance
• Account number – 045036070263

Note: Include your business name, business ID number, and reporting period in the remittance remarks. You're responsible for any wire transfer fees.

Invoice and Document Recordkeeping Requirements in Taiwan

Taiwan requires businesses to keep all invoices and supporting documents for seven years. This includes:

• Issued invoices (eGUIs)
• Purchase invoices and receipts
• VAT returns and payment records

For SaaS companies handling hundreds or thousands of transactions per month, manual recordkeeping becomes a serious compliance burden. Automated systems like Sphere maintain these records for you and can generate them on demand for audits.

Penalties and Compliance Risks

Taiwan takes VAT compliance seriously, and penalties for non-compliance can be steep. Late filing penalties include:

• If filing within 30 days after the deadline - 1% of the tax due for every two days overdue
  
  • Minimum penalty - NT $1,200
  • Maximum penalty -  NT $12,000
• If filing more than 30 days late – 30% of the tax due
  
  • Minimum penalty - NT $3,000
  • Maximum penalty -  NT $30,000

Penalties are due even if no tax is due. They are NT$1,200 (within 30 days) or NT$3,000 (more than 30 days late).

Taiwan gives extra penalties if businesses do not follow compliance rules. 

• Failure to issue e-invoices – Penalties ranging from NT$1,500 to NT$15,000 per violation, depending on severity and frequency.
• Failure to register on time – If you exceed the threshold and don't register, you can be hit with back taxes, penalties, and interest on all sales made after crossing the threshold.

If you do not comply, you can lose money and damage your reputation with Taiwanese customers. It can also create double tax burdens if disputes arise about whether tax was properly paid. 

Why Taiwan’s VAT Compliance Can Be Challenging

Taiwan is one of the most administratively demanding VAT jurisdictions in the world.

Taiwan has a separate registration system for cross-border electronic services. It also has a separate system for domestic businesses. Further, the Government Bonds Repurchase Transaction system is used by financial institutions. You need to carefully analyze which scheme applies to your business.

• Frequent rule changes – Taiwan regularly updates thresholds, invoicing requirements, and filing procedures. The registration threshold increased from NT$480,000 to NT$600,000 in April 2025, and more changes are expected as Taiwan modernizes its tax system.
• Heavy administrative load – The eTax portal is available in English, but many forms and instructions are only in Mandarin. Deadlines are strict, and the requirement to issue e-invoices within 48 hours means you need real-time integration.
• Unique cross-border e-invoicing mandate – Most countries only require e-invoicing for domestic sales. Though some, such as the EU, require them for intra-regional transactions. Taiwan requires foreign companies with no physical presence to issue invoices directly into the government system. This is a significant technical and administrative challenge.

Lean SaaS finance teams already handle U.S. sales tax, European VAT, and other compliance duties. Adding Taiwan's rules can quickly become overwhelming.

How Sphere Simplifies Taiwanese VAT Compliance

Sphere is built to handle complex, multi-jurisdictional tax compliance. Taiwan tax is exactly the type of regulatory compliance where automation makes a real difference.

Automated VAT Registration via Sphere's eTax Portal

Sphere determines whether you need to register under the Simplified scheme (for cross-border e-services) or the General scheme (if you have physical presence). We handle the registration process through the eTax portal, so you don't have to navigate bilingual forms or worry about submitting the right documents.

Real-Time Tax Calculation

Sphere analyzes every transaction to decide:

• Whether VAT applies (B2C vs. B2B)
• The correct tax rates (5% standard or an exemption)
• Any special rules based on product type

VAT is calculated automatically at checkout, so your customers always see the right amount and you never under- or over-collect.

Filing & Remittance

Sphere automatically files your bimonthly VAT returns on the 15th deadline. Tax is calculated from your transaction data, the return is submitted to the eTax portal, and payment is processed. All without manual intervention.

No more wire transfers with cryptic reference numbers. Sphere integrates payment directly, so you stay on time and compliant with zero effort.

Automated Taiwan E-Invoicing Integration

Sphere has direct integration with Taiwan's eGUI system. When you make a sale, Sphere:

• Issues a compliant cloud invoice within 48 working hours
• Submits it to the government e-invoicing system
• Stores a record for your seven-year retention requirement

You don't need to appoint a separate local eGUI agent—Sphere handles it end-to-end.

Real-Time Taiwan Transaction Monitoring and Alerts

Sphere continuously tracks your transaction volume and physical presence in Taiwan. As you approach the NT$600,000 threshold, Sphere alerts you that registration is coming up, so you're never caught off guard.

If your business expands and you open an office or hire staff in Taiwan, Sphere flags that you may need to switch from the Simplified scheme to the General scheme. And we help you make that transition smoothly.

Ready to simplify SaaS sales tax compliance?

Schedule a demo with Sphere today.

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Scale to Taiwan Without Compliance Headaches

Taiwan's VAT system is one of the most administratively demanding in the world. The 5% rate is simple. The registration process, mandatory e-invoicing, bimonthly filing, and strict deadlines create a big burden for SaaS finance teams.

If you are a US-based SaaS business expanding into Taiwan, you must learn how Taiwan’s business tax works. You need to know when to register and how to follow strict e-invoicing rules. That's exactly what Sphere delivers.

Sphere automates the entire compliance cycle so you can focus on growing your business in Taiwan.