Taiwan clarifies invoice treatment before business-tax exemption waivers

The guidance addresses supplies exempt under Article 8(1) of the Value-added and Non-value-added Business Tax Act. Before an approved waiver, an affected business cannot simply choose to issue a taxable uniform invoice, including at a customer’s request, or alternate between taxable and exempt invoices. Taxable invoicing and reporting of taxable sales follow approval.^[1]

Article 8(2) permits a business selling exempt goods or services to apply for Ministry approval to relinquish the exemption and calculate tax under the Act’s general value-added-tax rules. The statutory choice is not freely reversible: once approved, it cannot be changed for three years. This is an existing approval mechanism, not a new exemption or rate introduced by the announcement.^[2]

Whether an invoice must be issued is separately governed by Article 4 of the Regulations Governing the Use of Uniform Invoices. Where no invoicing exception applies, an exempt uniform invoice must still be delivered to the purchaser. The announcement contrasts a business selling only qualifying exempt agricultural products with a mixed taxable-and-exempt trader; exemption from issuing invoices does not remove reporting of exempt sales.^[1][3]

If an unapproved business mistakenly issues a taxable invoice for an exempt sale, the announcement says the sale should be treated as exempt when making the year-end adjustment of the non-deductible input-tax proportion, with overclaimed input tax repaid. Article 19 preserves the statutory distinction between exempt-only businesses and mixed activities. Groups should therefore check the supply classification, actual waiver approval and invoicing exception rather than infer deduction entitlement from an invoice’s tax label.^[1][2]