The National Taxation Bureau of Taipei, Ministry of Finance, has announced that offshore electronic service suppliers pricing their sales of digital services in foreign currencies are required to convert these amounts into New Taiwan Dollars (NTD) when reporting business taxes.

The Bureau clarified that foreign e-commerce operators without a fixed place of business in our territories and selling digital services to natural individuals within Taiwan are regarded as offshore electronic service suppliers according to Paragraph 4, Article 6 of the Value-added and Non-value-added Business Tax Act.

Those with annual sales exceeding NTD 480,000 should register for taxation and declare and pay business tax accordingly.

When reporting the sales amount or the amount of business tax payable or overpaid, offshore electronic service suppliers pricing their sales of digital services in foreign currencies should convert the amounts into New Taiwan Dollars based on the spot buying exchange rate announced by the Bank of Taiwan on the following dates: (1) the last day of the reporting period; (2) for entities undergoing merger, transfer, dissolution, or cessation of business, the last day of the reporting period prior to the occurrence of such events.

If the Bank of Taiwan does not announce the spot buying exchange rate for the currency concerned, the cash buying exchange rate should be used for conversion.

The Bureau provided an example to illustrate: Offshore electronic service supplier A, who has registered for tax purposes, sells digital services to natural individuals within our territory. If their sales are priced in US dollars, supplier A should report the business tax for the period of January to February of the same year by 15 March 2024.

Assuming the sales amount for this period (excluding business tax) is USD 100,000, the amount should be converted to New Taiwan Dollars based on the spot buying exchange rate of USD 1 = NTD 31.53 as announced by the Bank of Taiwan on 29 February 2024 (the last day of the reporting period).

Therefore, the sales amount in New Taiwan Dollars is NTD 3,153,000 (USD 100,000 × 31.53). After deducting input tax and any previous period’s tax credit of NTD 0, the payable tax amount is NTD 157,650 (NTD 3,153,000 × 5%).

The Bureau reminds offshore electronic service suppliers that to facilitate the conversion of their sales amounts into New Taiwan Dollars, they can visit the Ministry of Finance’s tax portal (URL: https://www.etax.nat.gov.tw) [Path: Home/Tax on Cross-Border Electronic Services/Business Tax/File and Pay Business Tax/Inquiry into Exchange Rate on Each Filing Period] to check the exchange rates announced by the Bank of Taiwan for each period.

Suppliers should use these rates to legally file and pay their business taxes.