Heirs continuing a sole proprietorship need not invoice or report inherited assets for business tax, the Kaohsiung National Taxation Bureau says.
Taiwan’s Kaohsiung National Taxation Bureau of the Ministry of Finance has clarified that heirs who continue a deceased family member’s sole proprietorship are not required to invoice or report inherited inventory and fixed assets for business tax purposes.
The guidance follows a recent inquiry from Mr. Chen regarding his late father’s beverage shop, which operated as a sole proprietorship under the uniform invoice system. Mr. Chen asked whether the remaining inventory and fixed assets must be invoiced and reported now that he plans to continue the business.
According to the Bureau, citing the Ministry of Finance’s interpretation No. Tai Tsai Shui 881901692 dated 11 March 1999, if the head of a sole proprietorship dies and the heir continues the business, applying simultaneously to change the responsible person or the business name, the inherited inventory and fixed assets are not considered “sale of goods” under Article 3, Paragraph 3, Subparagraph 2 of the Value-Added and Non-Value-Added Business Tax Act and are thus exempt from business tax.
The Bureau illustrated this with an example: a sole proprietorship using the uniform invoice system, headed by Mr. A, held TWD 500,000 in inventory and one truck as of 31 January 2026, the date of his death. The heir, Mr. B, continues the business as a sole proprietorship and applies to change the responsible person to himself. In this case, the inherited inventory and truck are not treated as sales and are exempt from business tax.
However, the Bureau cautioned that if a sole proprietorship is transferred to another person for continued operation, the act of transferring inventory and fixed assets is considered a sale of goods. In such cases, a uniform invoice must be issued and business tax reported. The transferee may deduct the input tax paid for acquired invoices against their output tax in accordance with the law.
The Bureau advised businesses to carefully observe these rules to avoid penalties. For inquiries, the public may call the toll-free service at 0800-000-321 or visit the Bureau’s website at https://www.ntbk.gov.tw to use the National Tax Smart Service “Tax Assistant” for online questions.
