|Foreign enterprise selling electronic services across borders can apply to the tax collection authority for a refund of tax overpaid|
National Taxation Bureau of Taipei, Ministry of Finance (NTBT) expressed that due to the rapid development of internet and increasing the electronic commerce, If foreign enterprises with no fixed place of business or business agent within Taiwan, but deriving Taiwan source revenue from selling electronic services to domestic business buyers, the domestic business buyers within Taiwan shall withhold the taxes from each gross payment to foreign enterprises and pay the taxes to the tax authorities in accordance with Article 88 and 92 of Income Tax Act.
NTBT pointed out that foreign enterprise derived Taiwan source revenue from selling electronic services to domestic business buyers, which had applied for approval of the applicable net profit ratio and the onshore profit contribution ratio within Taiwan by collection authority in advance, the revenue may be calculated based on the applicable net profit ratio and the onshore profit contribution ratio within Taiwan, and the net revenue shall withhold by 20% withholding rate at the date of payment.
In case of the revenue has been withheld 20% withholding tax by gross revenue at the date of payment, the foreign enterprise also may, or engage agent to, apply approved to re-calculated income by applicable profit ratio and the onshore profit contribution ratio within five years from the withholding tax payment date to the tax collection authority for a refund of tax overpaid.
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