TAIWAN Law and Practice Contributed by: Jaclyn Tsai, Aaron Chen, Teresa Huang and Jaime Cheng, Lee, Tsai & Partners
1.4 Consumer Protection Consumer Protection Act Governs Digital Goods and Services The Consumer Protection Act is the primary law governing consumer protection in digital trans - actions. In addition, the E-Commerce Consumer Protection Guidelines, issued by the Executive Yuan’s Consumer Protection Committee, pro - vide administrative guidance and outline best practices to help businesses comply with the legal requirements. Moreover, consumer infor - mation in transactions should also be protected under the PDPA. Dispute Resolution Under the Consumer Protection Act, when con - sumer disputes (including those involving digital products and services) arise, consumers may: • file a civil lawsuit directly; or • submit a complaint to the business (the busi - ness must properly handle the complaint within 15 days of submission). If the com - plaint is unresolved, consumers may escalate the issue to a consumer protection officer in local governments or apply for mediation through the Consumer Dispute Mediation Committee set up by local governments. If the complaint or mediation fails, the consum - ers may further proceed with a civil lawsuit. Advisable Practices for Establishing Dispute Resolution Mechanisms Businesses providing digital products or ser - vices may refer to the E-Commerce Consumer Protection Guidelines as a Best Practice for establishing dispute resolution mechanisms. To ensure fair and transparent dispute resolu - tion, the E-Commerce Consumer Protection Guidelines specify that:
• Regulatory changes: Frequent updates to tax laws, such as the impending taxation of virtual assets, require businesses to monitor developments closely to avoid non-compli - ance. 1.3 Taxation of Digital Advertising Tax Implications for Digital Advertising Revenues • Domestic entities: Domestic online platform operators providing advertising services must pay taxes in accordance with Taiwan’s Value- added and Non-value-added Business Tax Act and Income Tax Act. • Foreign entities: Foreign digital platform oper - ators providing advertising services in Taiwan are taxed based on the following income tax calculation formula for cross-border sales of digital goods and services as mentioned under ‘Taxation of Cross-Border Transactions’ in 1.2 Digital Economy Taxation : Income × Net Profit Ratio × Domestic Profit Con - tribution × Withholding Rate Ensuring Compliance With Tax Regulations • Tax registration: Foreign e-commerce operators with annual sales exceeding TWD480,000 must complete tax registration in Taiwan. • Issue electronic invoices: Foreign enterprises (without a fixed place of business in Taiwan) that sell digital services to individuals in Tai - wan are required to issue electronic invoices to the buyers. • Consult professionals: Businesses should actively seek professional tax advice to navigate uncertainties and ensure compliance with applicable laws and regulations.
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