Businesses which have already claimed input tax deductions remain obliged to declare subsequent purchase returns or allowances during suspension, the Kaohsiung National Taxation Bureau has said, citing a company case involving TWD 200,000 in returned goods.
Taiwan’s Kaohsiung National Taxation Bureau has clarified today, 20 August 2026, that businesses which have already declared an input tax deduction against output tax for goods or services acquired for their main or ancillary operations must still declare any subsequent purchase returns or allowances in the period in which they occur, even if the business has since suspended operations, in accordance with Article 15, Paragraph 2 of the Value-Added and Non-Value-Added Business Tax Act.
The Bureau illustrated the rule with an example. Company A purchased goods for resale from Company B in March 2026, with a purchase amount of TWD 400,000 and input tax of TWD 20,000. Company A deducted this input tax against output tax in its March–April 2026 business tax return.
Company A subsequently registered a suspension of operations in May 2026. In June 2026, the company returned part of the goods, resulting in a purchase return of TWD 200,000 and input tax of TWD 10,000. Although Company A was already in suspension at the time, because the original purchase input tax had already been declared and deducted, the company was still required to report the purchase return or allowance in its May–June 2026 business tax return, reducing the input tax by TWD 10,000.
The Bureau reminded businesses that if purchase returns or allowances occur during a period of suspension, they must obtain or issue a “Sales Return, Purchase Return, or Allowance Certificate” and declare the input tax deduction, or file a correction, in the period in which the return or allowance occurs.
The Bureau added that if a declaration is inadvertently omitted, but the business voluntarily files a supplementary declaration and pays the omitted tax before being reported or investigated by the tax authority or designated officials of the Ministry of Finance, then under Article 48-1 of the Tax Collection Act, only interest will be charged and no penalty will be imposed.
