- Businesses in Taiwan are reminded to be aware of the relevant tax regulations when donating supplies during the winter season.
- Different tax laws apply depending on the recipient of the donation, so businesses should be careful to avoid penalties.
- According to the tax bureau, when businesses donate goods to government agencies or charitable organizations, it is considered a sale and they should issue an invoice based on the market value of the goods.
- Businesses cannot deduct the input tax amount for goods or services that are not used for their own business or subsidiary activities, except for donations to the government or military support.
- If businesses have already deducted the input tax amount when purchasing goods and then donate them, they should issue an invoice to themselves based on the market value of the goods, and the input tax amount on that invoice cannot be deducted.
- The tax bureau provides an example of a company purchasing 50 electric blankets and donating 30 of them to the city government. The company should issue an invoice to itself for the sale of the blankets, but the input tax amount can be deducted due to the donation to the government.
- If the company donates the remaining 20 blankets to a private welfare organization, the input tax amount on the invoice cannot be deducted.
- The tax bureau advises businesses to be aware of the tax regulations when donating supplies and to seek assistance from their website or helpline for any tax-related questions.
Source: mof.gov.tw
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
