The fiscal representative is a local agent that represents a foreign company in front of the tax authorities. Upon request, our team that can help you open a company in Taiwan can also provide fiscal representative services.
To use a fiscal representative in Taiwan, the foreign company appoints the agent as part of the process of company registration in Taiwan or afterward.
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When do I appoint the fiscal representative when I open a company in Taiwan?
You can appoint a fiscal representative in Taiwan as part of the initial procedures for company formation (by including their appointment with the submitted documents, effectively setting them up as the tax agent from the beginning).
Alternatively, a foreign company in Taiwan can work with a fiscal representative after its incorporation, once the business owners deem it fit to use this service.
What is the appointment procedure like?
To appoint the representative, you will conclude a services agreement (which will stipulate the duties and obligations undertaken by the agent), and you will report their appointment to the authorities.
Any changes to the company’s particulars, such as the name of the agent who handles tax submissions, must be notified to the authorities according to law.
What is the role of the fiscal representative?
A fiscal representative is a designated agent that acts on behalf of the company in Taiwan and oversees the submissions made to the tax authorities.
The fiscal representative in Taiwan manages not only the company’s tax obligations (tax payments, periodic filing, and submissions) but can also act as liaison with the tax authorities.
The tax agent will oversee the company’s filing and payment for the corporate income tax and for the value-added tax.
The fiscal representative can also register the business for VAT purposes, as all locally registered companies in Taiwan are required to do (all companies register, there is no applicable minimum registration threshold).
What are the powers of the fiscal representative?
Using a fiscal representative in Taiwan does not mean that the company owners delegate important powers within the company.
The following are some of the powers and limitations of the tax representative:
- The fiscal representative handles tax submissions and payments. Their powers concern meeting the filing and payment deadlines.
- Their role is not to manage or decide certain financial aspects within the company, nor do they have the authority to do so.
- The fiscal representative is not an accountant; therefore they are not the ones to prepare the annual financial statements. They are, however, liable for the correct submissions.
- To achieve optimal results, the fiscal representative knows Taiwan’s tax system and the requirements set forth by the Ministry of Finance for the type of company it represents.
- The agent works closely with other key personnel, such as the accountants, to ensure complete compliance for the company.
Are there penalties for not using a fiscal representative in Taiwan?
It is not mandatory to use a fiscal representative in Taiwan; however, tax compliance and filing are.
A foreign company that does not have a local tax representative in Taiwan will not be penalised for this, insofar as it observes the tax payment schedule, the filing deadlines, and the annual financial statement submissions.
Using a fiscal representative is not mandatory in Taiwan; however, it can be helpful in the case of foreign companies for which the shareholders and managers are foreign persons who cannot be present in Taiwan at all times.
If you would like to use a fiscal representative in Taiwan or have other questions concerning taxation, please contact our Taiwan company formation experts.