6.7
Internet Transactions in the Cloud Service Model, the tax
environment of Taiwan
Synopsis
:
1.
Tax regulation for internet transactions
2.
Existing tax issues on Taiwan Internet transactions
With the popularity of mobile devices and enhanced network bandwidth in recent years,
consumers, on their personal mobile devices, can dynamically share messages in audio and
video in real time. Also, online shopping and social-network interaction has become a trend.
Enterprises sensed the huge internet-based business opportunities, and adjusted their
marketing strategies, and sales model of commodities or services. Even though cloud
services expanded Internet transactions and facilitated more diversified business model, for
Internet transactions in Taiwan, the assessment of tax is based on the “Directions on the
Levy of Business Tax and Income Tax on Transactions over the Internet” Decree No.
Tai-Tsai-Shui-09404532300 issued on May 5, 2005 by the Ministry of Finance (MOF).
Therefore, there is still room for further exploration.
6.7.1
One: Directions on the levy of Internet transactions in Taiwan -
Example of the Internet platform provider’s profit-seeking enterprise
income tax
1.
Transaction patterns of the Internet platform providers
a. Internet platform providers such as Google/YouTube, Facebook, and Yahoo,
provide a number of free services to attract tens of millions of traffic. Their main
operating income is from advertising revenue.
b. Internet platform providers cooperate with other vendors to build Web pages
on the Internet platform allowing them to leased area or sell products on
internet, then extract a certain percentage of sales revenue.
c. Other value-added services: Internet Shopping Mall, on behalf of the clients,
collects transaction fees from processing cash flow transactions and after-sale
customer services.
2.
Determination of country of origin of Internet platform operator
a. According to Taiwan's " Directions on the Levy of Business Tax and Income
Tax on Transactions over the Internet ", for the website design and
construction fees, platform rentals, merchandise slotting fees or advertisement
