The Northern Regional Tax Bureau of the Ministry of Finance has stated that, according to Article 8, Paragraph 1, Subparagraph 9 of the Value-Added and Non-Value-Added Business Tax Act (hereinafter referred to as the Business Tax Act), magazines sold by registered magazine publishers are exempt from business tax. Furthermore, based on the legislative intent to promote culture and education, the Ministry of Finance issued Interpretation Letter No. 7560245 on August 20, 1986, stipulating that domestic businesses selling domestic newspapers (newsprint) and magazines (periodicals) are exempt from business tax, regardless of whether these are their own publications. Therefore, newspapers and magazines are considered goods exempt from business tax. However, non-small-scale business operators selling newspapers and magazines do not yet meet the requirements for exemption from issuing unified invoices as stipulated in Article 4 of the Uniform Invoice Regulations. Therefore, when selling newspapers and magazines, they must issue invoices as required and deliver them to buyers.
The bureau provided an example, stating that they recently discovered that Company A, a business operating in the wholesale of books and magazines, had a significantly higher amount of input tax invoices than output tax invoices in 2019. Moreover, their inventory for that year did not show a significant increase. After investigation, it was confirmed that Company A had purchased and sold magazines that were exempt from business tax but had not issued tax-exempt unified invoices for sales totaling over 24 million NT dollars. Although there was no additional tax liability, Company A was subject to a penalty of less than 5% (up to a maximum of 1 million NT dollars) according to Article 44 of the Tax Collection Act.
The bureau emphasized that when non-small-scale business operators sell newspapers and magazines, they must issue tax-exempt unified invoices and report business tax as required to avoid penalties. If there are instances of omitted invoice issuance, as long as they issue unified invoices and report the tax-exempt sales amount on the “Business Sales and Tax Declaration Form (403)” before being investigated by the tax authorities or designated personnel from the Ministry of Finance and without prior reporting, they can avoid penalties. If there are any uncertainties, please feel free to inquire via the toll-free service hotline at 0800-000321. The bureau will provide detailed consultation services.
Source: mof.gov.tw
