The National Taxation Bureau of Taipei, Ministry of Finance, states that business entities engaged in overseas study or educational travel facilitation services and receiving commissions from foreign schools must issue taxable uniform invoices and file and pay business tax in compliance with Articles 1 and 4 of the Value-added and Non-value-added Business Tax Act, as this activity constitutes the provision of services within the territory.
The Bureau clarifies that with the pandemic easing this year, many students are planning to study abroad or engage in educational travel, often arranging the procedures through study abroad or educational travel agencies. The business entities engaging in domestic agency services for overseas study or educational travel handle applications for those students within the territory. After those students register at foreign schools and pay tuition fees, the schools pay commissions to these business entities. As the provision and utilization of these services occur within the territory of the Republic of China, constituting domestic service provision rather than services related to exports, the application of the zero-tax-rate provision under Article 7, Paragraph 2 of the Value-added and Non-value-added Business Tax Act is not applicable. Therefore, business entities must issue taxable uniform invoices for filing and paying applicable business taxes.
The Bureau provides an example where Business Entity X acts as an agency for Individual A's overseas study service with School J. After Individual A independently registers and pays tuition to School J, located abroad, Business Entity X receives a commission of NT$10,000. Afterward, Business Entity X must issue a taxable uniform invoice for filing and paying business tax as mandated.
The Bureau reminds that the business entities providing agency services for overseas study or educational travel and receiving commissions from foreign schools should promptly file and pay business tax in accordance with the legal regulations if there is any erroneous reporting of sales at the zero-tax-rate to avoid penalties until investigated by designated investigators of the Bureau or the Ministry of Finance without prior complaint or investigation by the tax authorities.
(Contact: Ms. Lu, Head of the Sales Tax Division; Tel: 886-2-2311-3711 ext.1830)