- Businesses cannot claim tax deductions for VAT paid on expenses related to year-end parties or spring dinner events
- Expenses such as venue rental, catering, performance fees, and raffle prizes for these events are not eligible for VAT credit under Article 19, Section 1, Clause 4 of the VAT law
- The Kaohsiung National Tax Bureau clarifies that VAT receipts for goods or services as employee rewards from such events cannot be used to claim tax credits
- If goods originally purchased for sale are used as employee raffle prizes and the VAT has been claimed, they must be treated as sold goods and invoiced at the current market price according to specific clauses of the VAT law
- Example given where a company buys coffee machines for a raffle cannot claim the VAT and must not issue an invoice when giving them as prizes
- However, if goods like tablets initially bought for sale are used as prizes and VAT was previously claimed, the company must issue an invoice at the current market price
- Businesses are reminded to correct any wrongful VAT claims or failure to issue invoices for goods considered sold, to avoid penalties but can rectify errors voluntarily before any investigation to possibly avoid fines
- Businesses with questions can contact the tax bureau via a toll-free number or use the online assistant on the bureau’s website for guidance
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.
