The National Taxation Bureau of Kaohsiung, Ministry of Finance stated that some small business entities were found engaging in non-registered business activities and were penalized due to failing to make alternation registration.
The Bureau stated that small business entities who expanded their business scope without making any amendment to the business registration (i.e. increasing the number of registered business items) would not only be penalized for their failure of making a change to business registration by laws, but also be charged with 1% or 5% tax on their sales revenue generated from the said illegal business depending to the industry and scale thereof.
For example, the Bureau stated that Business Entity A registered in retail sale of clothes was approved as a small business entity by the tax authority; and its business tax rate was 1% as assessed by the tax authority based on its monthly revenue of NT$80,000. However, Business Entity A expands its business scope to cosmetics between June to December of 2018 without making any change to registered business items; and its month sales revenue also increased to NT$180,000. With respect to its income generated from cosmetics, Business Entity A will be penalized with 1% or 5% tax in accordance with Article 10 or 13 of Value-added and Non-value-added Business Tax Act, depending on the scale thereof. That is, if Business Entity A’s monthly income exceeds NT$200,000 and is below the originally assessed NT$120,000 (NT$200,000 minus the assessed revenue amount of NT$80,000), it will be charged with 1% business tax. As for NT$60,000 that exceeds the limit of NT$200,000, Business Entity A will be charged with 5% business tax.
The Bureau highlighted that the monthly revenue of small business entities was assessed by the tax authority according to their registered business items. Business entities that desire to add and change registered business items shall proactively submit the alternation application the tax authority. If not, business entities that violate the law will not only pay the tax, but also be penalized.
Contact: Miss Huang, the Revenue Officer of the First Affairs Division
TEL: 07-7256600 ext.7553