For full control of the source of tax by Ministry of Finance in Taiwan, the revision of acts is progressing successively. For instance, in order to stop landlords from split tax evasion, the revision of “House Tax Act” is undergoing by Legislative Yuan. Besides, in order to evade tax by an illegal arrangement of shareholding, the revision of “Income Basic Tax Act” is undergoing to list the transaction of stocks of unlisted companies into Alteration Minimum Tax for individuals.

Apart from the revision of acts, to face the up-to-date online transaction models, the income from transactions under the table has been disclosed gradually and hindered actively by Ministry of Finance in Taiwan to maintain the fairness of taxation. Currently, the overall condition of payment flow by credit cards is required to be submitted to Ministry of Finance periodically as well as the information of other electronic payment agents to proceed either. In the meantime, it is necessary to provide Ministry of Finance with the accounts which amount of savings reaches to certain level with high frequency by Financial Supervisory Commission.

From the official statement of Bureau of Taxation, it is quite challenging to catch up those intentional tax evasion payers in these new transaction models. For example, group buying is prevalent among clubs on Facebook, the buyers are on buying spree, but seller fails to bear their obligation to issue the uniform invoice and pay taxes pursuant to laws, which is not a fair phenomenon for those sellers who paid taxes legally.

Basing on our knowledges, the cases disclosed most frequently are business tax evasion and individual income tax evasion by Bureau of Taxation. Due to business tax being the source of various categories of tax, it is usually under full attention by Bureau of Taxation in Taiwan. The top 3 illegal models supervised closely are transaction of goods on Facebook, transaction of game credits and online transaction platforms.

Case 1. Transaction of braised dishes

From December in 2017 to June in 2020, the income from all transactions of braised dishes or frozen products on Facebook distributed to buyers’ houses by the delivery agent failed to declare the relate taxes within these 2 years.

It is found that the business entity took advantage of the delivery agent to receive the amount of payment in the form of delivery service by remittance after comparing the information of payment and goods flow by Bureau of Taxation in Taiwan. The sales income within theses 2 years reached up to TWD$8,870,000. So, this entity not only had to pay overdue taxes in business tax 5%, about NTD$4,400,00, but also had to pay the extra amount of fine.

Case 2. Transaction of virtual online treasuries

A person who undertook transaction of virtual treasuries and sales of game credits via communication apps, such as Line, to notify buyers for settling the payment through the third-party payment apps evaded the audit from Bureau of Taxation intentionally.

Unfortunately, the bank account of this person was found an unnatural phenomenon of payment flow with cross-entity information system by Bureau of Taxation. Furtherly, within April in 2016 to March in 2017, the sales income reached up to NTD$83,000,000 without the registration of Tax ID and the amount of tax evasion is up to NTD$79,000,000. The amount of overdue taxes close to NTD$4,000,000, with the fine in double amount, which total amount in NTD$8,000,0000 is required to pay for this person.

Case 3. Sales on online transaction platform

With more and more people choosing to devote themselves into online transaction platform, sometimes, it is required to present the transaction history from these sellers to understand the frequency and amount of transaction and control the source of tax by Bureau of Taxation to avoid any abnormal transaction.

A person sold electronic devices in sales income more than NTD$40,000,000 on PChome, Shopee, and other online transaction platform from July in 2015 to December in 2018, but it was caught up by Bureau of Taxation and required to recover the overdue taxes and fine about NTD4,000,000.

Nevertheless, some “private” clubs on Facebook are not easily to visit, so it is hard to fully track and understand the siutation of thes clubs at times for officials. Thus, it is exteremly important to collect all tax information in the future. Upon statement of Ministry of Finance, collecting tax information is not only to understand if the tax payables are done legally, but also to promote the efficiency of taxation as well as to comapre the information in cross-entity to further understand if any of abnormal condition ocurred.