Quick Answer
Zero-rated export sales means that when a Taiwanese business sells qualifying goods or services, the business tax (VAT) rate is 0%. Under Article 7 of the Value-added and Non-value-added Business Tax Act, zero rating covers exported goods, export-related services or services provided in Taiwan but used abroad, international transport and more. Under Article 11 of the Enforcement Rules: goods exported through customs need no supporting documents; goods exported by post or express courier with an FOB value of NT$50,000 or less need a copy of the receipt issued by the post office or courier. For triangular trade recognized as commission income, the Ministry of Finance’s Q&A says zero rating under Article 7(2) can apply.
Which Transactions Are Zero-Rated?
Under Article 7 of the Business Tax Act (excerpt):
| Subparagraph | Item |
|---|---|
| 1 | Exported goods |
| 2 | Export-related services, or services provided in Taiwan but used abroad |
| 3 | Goods sold by licensed duty-free shops to transit or departing passengers |
| 4 | Goods or services sold to bonded-area businesses for their operations |
| 5 | International transport (subject to reciprocity and other conditions) |
| 8, 9 | Goods sold by bonded-area businesses to taxable-area businesses for direct export, or placed in free trade zones, bonded warehouses or logistics centers for export |
What Supporting Documents Are Needed?
Under Article 11 of the Enforcement Rules of the Business Tax Act (excerpt):
| Situation | Supporting document |
|---|---|
| Exported goods declared through customs | None required |
| Exported by post or express courier, FOB value NT$50,000 or less | Copy of the receipt issued by the post office or courier |
| Exported by post or express courier, FOB value over NT$50,000 | Must still be declared through customs; no documents required |
| Export-related services, foreign exchange sold or deposited with a designated bank | Foreign exchange certificate issued by the designated bank |
| Export-related services, foreign exchange not sold or deposited with a designated bank | Copy of the original foreign exchange receipt |
Zero-Rated vs Tax-Exempt
A zero-rated sale is still a taxable transaction at a 0% rate, so the business can credit or reclaim its input tax; a tax-exempt sale is not subject to business tax, and related input tax usually cannot be credited. That is why export-focused businesses often have input tax to reclaim. Confirm actual filings with your accountant.
Triangular Trade and Zero Rating
The Ministry of Finance tax Q&A (No. 9216) explains that a triangular trade business recognizing the price difference as commission income (brokerage) may apply zero rating under Article 7(2), with foreign exchange certificates and transaction documents. One recognizing full purchases and sales (buy-sell) falls outside the scope of business tax, because the goods neither ship from nor are delivered within Taiwan. See Triangular Trade Business Tax and Invoices.
How Tang Sugar Can Help
In export and triangular and multilateral trade, Tang Sugar helps structure contracts, invoices and payments so documents support your tax filings. We still recommend your accountant handle the filings. Contact us.
FAQ
What is zero-rated export in Taiwan?
Under Article 7 of the Business Tax Act, exported goods, export-related services and similar sales are taxed at 0%, and the business can credit or reclaim its input tax.
What documents prove a zero-rated export?
Goods exported through customs need none; goods exported by post or courier with an FOB value of NT$50,000 or less need a copy of the post office or courier receipt.
Is zero-rated the same as tax-exempt?
No. Zero-rated sales are taxable at 0%, with input tax creditable or refundable; tax-exempt sales are not subject to business tax, and related input tax usually cannot be credited.
Can triangular trade be zero-rated in Taiwan?
According to the Ministry of Finance Q&A, a business recognizing the price difference as commission income (brokerage) may apply zero rating under Article 7(2).
Can zero-rated exporters get a tax refund?
Yes, zero-rated sales are taxable, so input tax can be credited or refunded, and export-focused businesses often have input tax to reclaim. Confirm actual filings with your accountant.
Further Reading
- Triangular Trade Business Tax and Invoices
- What Is an Export Agent Service?
- What Is a Customs Broker?
Sources
- Laws & Regulations Database of Taiwan: Value-added and Non-value-added Business Tax Act (Article 7)
- Laws & Regulations Database of Taiwan: Enforcement Rules of the Business Tax Act (Article 11)
- Ministry of Finance eTax Portal: Triangular trade zero-rating Q&A (No. 9216) (in Chinese)
