Taiwan reminds franchisors to issue uniform invoices for franchise fees VAT applies to franchise payments covering services, goods, or both.
Taiwan’s Kaohsiung National Taxation Bureau of the Ministry of Finance stated that when a business operator (franchise headquarters) charges a franchisee a one-time franchise fee for opening a store, the fee is regarded as consideration for the sale of services. If the franchise fee also includes equipment, tools, or raw material costs, it is considered a sale of both goods and services. In either case, a uniform invoice must be issued and VAT must be reported and paid in accordance with the law.
The bureau explained that transferring ownership of goods to another party in exchange for consideration constitutes a sale of goods. Providing services to another party, or allowing another party to use or benefit from goods in exchange for consideration, constitutes a sale of services. Therefore, if a franchise headquarters provides services such as brand licensing and training to franchisees while also supplying equipment, machinery, or raw materials, the franchise fee received includes both the sale of goods and the sale of services, and a uniform invoice must be issued to the franchisee.
The bureau reminded businesses that if franchise fees have not been properly invoiced and related sales revenue has not been reported, Article 48-1 of the Tax Collection Act allows voluntary correction before a report is filed by a third party or before an investigation is initiated by tax authorities or investigators designated by the Ministry of Finance. Taxpayers who voluntarily file amended returns and pay the outstanding tax may avoid penalties, although interest will still apply.
This announcement was made on 27 May 2026.
