The national tax bureau of Taipei has initiated tax audits of representative offices of foreign companies.
In general, a foreign company may choose to set up different types of entities in Taiwan for the purpose of conducting different levels or types of activities in Taiwan. Depending on the purpose of the subject activities, the types of entities commonly established can include a subsidiary, a branch office or a representative office. Each is subject to different rules and restrictions from both regulatory and tax perspectives.
Recent tax audits by the tax bureau in Taipei have revealed instances when the activities conducted by entities set up by foreign companies exceed the scope allowed by the tax rules. Accordingly, the tax bureau recently initiated tax audits that focus on tax compliance, including value added tax (VAT) reporting obligations, of representative offices.
Read an August 2017 report [PDF 215 KB] prepared by the KPMG member firm in Taiwan
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