What is an Invoice?
In any commercial transaction an invoice is a very important document as it not only details the charges of the transaction; but is also necessary to ensure parties are compliant with tax regulations. After an invoice has been prepared and sent by a seller to a buyer, the document then stands as a record of a transaction between the parties. This document is a legal record of the transaction, it can be used to track payments and it ensures that a seller will be paid on time.
Should I Externalize Client Invoicing?
Externalizing the process of invoicing your clients may have significant benefits such as:
- Lower costs, as it negates the need to internalize this service or have internal staff dealing with it.
- Access to expertise and knowledge, regarding tax laws and processes etc.
- The use of a comprehensive and organized system; allowing you to easily keep track of transactions.
- It enables your company to focus on its main business.
- Different currencies can be used to make payments i.e. EUR, USD, or NT$.
Invoicing in Taiwan
In Taiwan it is mandatory for businesses to provide a special Government Uniform Invoice (GUI) when a transaction is made; This is vitally important for tax purposes. Foreign businesses who supply digital goods or services in Taiwan, must further comply with Taiwan’s eGUI and e-invoicing requirements.
Taiwan Invoice Requirements:
In Taiwan VAT invoices are required to have the following information:
- The names, including trading names, of both the customer and supplier;
- Registered addresses of customers and suppliers;
- The invoice date;
- Detailed description of the goods or service supplied; and
- The taxable amount, VAT amount and the gross amount.
eGUI: For all Foreign E-commerce Operators
From January 2019 the Ministry of Finance (MoF) in Taiwan enforced e-invoicing regulations on foreign suppliers (e-commerce operators). The MoF has also imposed a deadline, January 2020, by which all foreign businesses have to be fully compliant. The introduction of e-invoices, in 2006, was in an attempt to reduce the amount of paper invoices being printed.
For foreign businesses there are various practical considerations that need to be made. Ensuring full compliance with Taiwan’s eGUI system may be a labor intensive task, requiring many hours and possible challenges with language.
Due to regulation, non-resident businesses cannot integrate with Taiwan’s MoF system and therefore are required to find a third party, in Taiwan, to integrate with the system. The integration is necessary as the system allows businesses to receive eGUI numbers and transfer the details of sales to the MoF.
Failure to issue GUI’s will result in a penalty being imposed on the e-commerce business, as this amounts to noncompliance with the VAT act and Tax Collection act in Taiwan. Failure by an e-commerce business to issue a GUI more than 3 times in a 12-month period, may result in the closure of the e-commerce business in Taiwan. Therefore, it is imperative for e-commerce businesses to ensure compliance in a correct and timeous manner.
Let INS Global Assist You Today
INS Global enables providers of goods and services who do not have an existing entity in Taiwan to invoice their clients in the local currency (NT$). We provide a link between your business and your clients based in Taiwan.
INS Global Consulting is dedicated to providing great value to our clients while maintaining a high level of integrity. As Asia’s leading Professional Employment Organization (PEO), we strive to create an ecosystem for our clients to strive for success, while we take care of the rest.
If you find this information useful, you may want to take a look at our tax solutions in Taiwan for more some useful information on payroll and tax in Taiwan.