Reminder from Jingxun Accounting Firm in Datong District, Taipei - The business operator should issue a unified invoice and pay the business tax in order to obtain the compensation for the termination of the project

The business operator shall issue a uniform invoice and report and pay the business tax in order to obtain the compensation for the termination of the project

The North District National Taxation Bureau of the Ministry of Finance stated that when a business operator undertakes a project, the compensation for the termination of the project due to the delay and loss of other companies is the "value-added and non-value-added business tax law" Article 16 Item 1 "All additional fees charged by the business person on the price of goods or services" are within the scope of sales, and a unified invoice should be issued and reported to pay business tax.

The bureau gave an example. Company A was engaged in the steel bar engineering industry. It obtained compensation for the termination of the project from Company B. It failed to issue a unified invoice and report business tax, and it failed to report sales of more than 2.79 million yuan. The additional tax amount was more than 130,000 yuan, and the fine was more than 130,000 yuan. Company A was dissatisfied, and applied for reexamination, claiming that according to the regulations on the use of uniform invoices, the compensation in dispute could be exempted from using or issuing uniform invoices. "Income" can be exempted from issuing a uniform invoice, which means that the reason for obtaining the compensation income is not from the sale of goods or services. If the reason is based on the sale of goods or services, it is related to the sale and falls within the scope of sales. The Ministry of Finance's Interpretation No. 0910454163 issued by the Ministry of Finance on July 9, 1991 stipulated that a unified invoice should still be issued and the business tax should be submitted, and it should be reviewed and rejected.

The bureau reminded that compensation, deposit, advance payment, installment payment, settlement money and liquidated damages based on sales of goods or labor relations are all within the scope of sales, and business operators should follow the "sales certificates issued by business operators" respectively. Issue a unified invoice and file business tax within the time limit stipulated in the "Time Limit Table" to avoid being punished by the National Taxation Bureau for tax payment.

Source: Northern District Internal Revenue Service, Ministry of Finance