Taiwan’s tax authority warns businesses to file a business tax return for the cancellation period after ending operations. Failure to file within 15 days of cancelling registration may result in penalties under the Business Tax Act.
Taiwan has reminded businesses that cancelling tax registration does not end all tax obligations, and that a business tax return must still be filed for the cancellation period within the statutory deadline to avoid penalties.
The Kaohsiung National Taxation Bureau of the Ministry of Finance said businesses that decide to cease operations and complete the cancellation of tax registration often mistakenly believe that all tax-related procedures have been completed. In practice, many overlook the requirement to file the business tax return for the cancellation period, which may result in penalties for late filing.
According to Article 35 of the Value-Added and Non-Value-Added Business Tax Act (the “Business Tax Act”), unless otherwise provided by the Act, businesses must file a return every two months within 15 days after the beginning of the following period, regardless of whether there are sales. The return must be submitted using the prescribed format together with documents related to tax refunds or offsets, declaring sales and the amount of business tax payable or refundable. Where tax is payable, payment must first be made to the Treasury, and the receipt must be submitted together with the return to the competent tax authority.
The Bureau also noted that Article 49 of the Business Tax Act sets out penalties for late filing. Where a business fails to file its sales report or uniform invoice details within the statutory period and the delay does not exceed 30 days, a late filing penalty of 1% of the tax payable for every two days overdue will be imposed, with a minimum of TWD 1,200 and a maximum of TWD 12,000.
If the delay exceeds 30 days, a negligent filing penalty of 30% of the tax payable will be imposed, with a minimum of TWD 3,000 and a maximum of TWD 30,000. Where no tax is payable, the late filing penalty is TWD 1,200 and the negligent filing penalty is TWD 3,000.
In addition, Article 33, Paragraph 1 of the Enforcement Rules of the Act stipulates that where a business required to file under Article 35 undergoes merger, transfer, dissolution, or termination of business, it must complete the business tax return for the current period within 15 days from the date of occurrence. The return must include uniform invoice details and documents related to tax refunds or offsets and be submitted to the competent tax authority. Where tax is payable, payment must first be made to the Treasury and the receipt submitted together with the return.
Accordingly, when a business cancels its tax registration, it must still file the business tax return for the cancellation period within 15 days from the date of cancellation, regardless of whether any goods or services were sold.
The Bureau provided an example involving Business A, which was approved by the competent authority to cancel its commercial registration on 14 January 2026 and completed the cancellation of tax registration with the tax authority on the same day. Although the business had duly filed the November–December 2025 business tax return, it mistakenly believed that no return was required for the cancellation period 1–14 January 2026 because no goods or services were sold.
When the omission was later discovered by the National Taxation Bureau, the filing deadline had already been exceeded by more than 30 days, and a negligent filing penalty of TWD 3,000 was imposed under Article 49 of the Business Tax Act.
The Bureau explained that while businesses generally file returns every two months within 15 days after the start of the following period, a special rule applies in cases of merger, transfer, dissolution, or termination of business, such as cancellation of tax registration. For Business A, which cancelled registration on 14 January 2026, the correct filing deadline was 29 January 2026, rather than 15 March 2026.
The Kaohsiung National Taxation Bureau urged businesses to carefully confirm filing deadlines when ceasing operations and to complete the required tax return for the cancellation period on time to avoid unnecessary financial loss.
This announcement was made on 5 March 2026.
