On 5 October 2026, the NTB published a compliance reminder addressing the value-added tax (VAT) treatment of ancillary charges—freight, installation, and service fees—collected by business entities in connection with the sale of goods or services. Under Article 8 of the Value-Added and Non-Value-Added Business Tax Act, the sales amount includes all consideration received, whether designated as price, fee, or surcharge. Consequently, any separately stated transportation, installation, or service fees must be included in the taxable base and reflected on the uniform invoice (GUI) issued to the buyer. The guidance clarifies that this rule applies regardless of whether the seller arranges the transport directly or engages a third-party carrier, and irrespective of contractual terms allocating freight cost to the buyer. Non-compliance may result in penalties of up to 5% of the omitted amount, with a minimum of NT$1,000 per violation, plus potential denial of input VAT credits for the buyer.
Key Takeaways
- Inclusive Taxable Base: All incidental charges billed to the customer form part of the sales amount; separate invoicing for freight or installation is prohibited.
- Electronic Invoice Requirements: For e-invoice issuers, the XML data must populate the “Freight” and “Service Fee” fields in the invoice detail section to ensure audit trail integrity.
- Cross-Border Transactions: For exports, freight and insurance up to the FOB point are zero-rated; however, domestic freight collected from foreign buyers remains taxable unless qualifying as export-related services under Article 7.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement