There are frequent questions from individuals or business entities regarding the scope of “government” in the exemption of business tax for government consigned social welfare services, cultural services, and business consigned to cooperatives, farmers’, fishermen’s, workers’, commercial, and industrial associations.
According to the National Taxation Bureau of Kaohsiung, Ministry of Finance, Article 3 of the Basic Code Governing Central Administrative Agencies Organizations ( hereinafter referred to as this Code), which was amended and promulgated on February 3, 2010, regulates the Central Administrative Agencies Organizations. In addition to retaining the original definitions of “agency” and “independent agency” and deleting the term “auxiliary agency,” the definition of “affiliated institution” is added, which means an organization subordinate to an agency established in accordance with organic laws and regulations and vested with partial authority and duties to handle functions in line with the purpose of its establishment. Moreover, Article 16 of this Code stipulates that agencies may establish experimental (testing), inspection, research, cultural and education, medical, social welfare, corrective, sheltering, training, and other affiliated institutions within their scope of authority and functions as governed by organic laws and regulations. The organization of affiliated institutions shall be governed mutatis mutandis by the provisions of this Code. Therefore, the authority and duties of the “affiliated institutions” stipulated in this Code are part of their respective agencies, and can be considered as an extension of the agencies by nature. For example, the Ministry of Health and Welfare, in order to handle the business of the elderly and execute related welfare matters according to the law, has established the Home for the Elderly, an extension of the authority and duties the agency, as a fourth-level affiliated institution in accordance with the “Organizational Guidelines for the Welfare Institutions for the Elderly, Physically and Mentally Handicapped, Children, and Adolescents of the Ministry of Health and Welfare.”
In order to meet the needs of the changing socio-economic environment and the government’s organizational adjustments, the Ministry of Finance issued the Order of Tai Cai Shui Zi No. 11204651080 dated on November 2, 2023, to explain that, under Paragraph 1 of Article 8 of the Value-added and Non-value-added Business Tax Act, the term “government” refers to the government’s administrative agencies and the affiliated institutions stipulated in Paragraph 3 of Article 3 of this Code, and that the government’s consigned services and business should be limited to what is required under the government's functions and is directly consigned by the government.
The Bureau would like to remind those who are consigned by the government to provide services and business on behalf of the government to pay attention to the applicable regulations on the exemption of business tax. If the public has any questions, they can call the toll-free service hotline at 0800-000-321, or go to the Bureau’s website (https://www.ntbk.gov.tw) to make inquiries online using the National Tax Smart Customer Service “National Tax Little Helper.”
Provided by: Business Tax Division
Contact Person: Chief Yen Ching Chen Telephone: (07)7256600 ext. 7310
Contributor: Ya Hui Teng Telephone:(07)7256600 Ext. 7313