The National Taxation Bureau of the Northern Area （NTBNA）, M.O.F., stated that profit-seeking enterprises that sign sales contracts with leasing companies for financing for inventory should issue uniform invoices separately. However, the invoice amounts should not be recognized as goods imported or sold.
The Bureau further explained that for profit-seeking enterprises which are financed through inventory buyable afterwards from leasing companies, although they sign contracts and issued uniform invoices accordingly, the essence of these transactions are financing operating funds rather than goods sold. Therefore, the invoice amounts should not be recognized as goods imported or sold. In addition, according to Article 15 of the Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax, profit-seeking enterprises should reveal this transaction in Profit-seeking Enterprise Annual Income Tax Return under the table of sales revenue reconciliation. As for the difference of invoice amounts issued, it should be recongnized as interest expense during credit.
The Bureau explains using an example: Company A signed a sales contract for financing NT$20 million through inventory from January 1, 2023, to June 30, 2023 with Company B which engaged in leasing. Company A issued uniform invoice for NT$20,000,000 to Company B while receiving uniform invoice for NT$20,600,000 issued by Company B. The different amount between the two invoices should be amortized over six months and recognized as interest expense for NT$100,000. Therefore, Company A should deduct NT$20,000,000 from the table of sales revenue reconciliation in 2023. In addition, the NT$600,000 difference should be recognized as interest expense instead of goods imported.
The Bureau would like to especially remind enterprises that if they sustain financial need through inventory from leasing companies, the essence of these transactions are loan agreements. If there are any questions, please visit the website of NTBNA（https://www.ntbna.gov.tw） to inquire about the relevant laws or call the toll-free service number 0800-000321 for detailed consultation services.
（News contact: Ms. Chen, Head, Profit-seeking Enterprise Income Tax Division.
Tel. No. 03-3396789, Ext. 1330）