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Taiwan plans VAT on foreign e-services.

  • Jun 26, 2016 | Richard Asquith

Taiwan plans VAT on foreign e-services.

Taiwan has become the latest Asia Pacific country to plan the imposition of VAT on electronic services supplied by foreign providers to local consumers.

Currently, when Taiwanese consumers purchase online e-services from offshore providers, such as Google Play, Apple iTunes or Skype, they do not pay 5% VAT to the provider. Instead, they should self-declare and pay any VAT due – similar to the US regime.  The types services include: streaming video & music; online gaming; e-books; online journals; online website membership fees; and web hosting fees.

The new proposal would require such non-resident providers to VAT register with the Taiwanese tax authorities, collect and remit local VAT.

The move replicates similar plans from New Zealand (Oct 2016) and Australia (Jul 2017). Japan and South Korea have already implemented VAT obligations on non-residents.

The EU reformed its digital services VAT regime in 2015, requiring EU-based provider to charge the VAT rate of their consumers’ country of residence.  Non-EU providers to e-services to EU consumer had to already do this since 2003.

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.