The Amusement Tax is a special sales tax which is collected from the paying consumers either included in the admission or taxed separately, this is also referred to as an opportunity tax since the timing of tax can be momentary. The amusement tax varies from other types of taxes, in that the taxpayer pays to get entertained, and the tax is collected by the facility operator or owner of an entertainment venue, facility or event on behalf of tax agencies. A brief description is provided to inform taxpayers to the state of amusement tax and tips on more tax savings.
Part 1 Amusement Tax saving tips:
1. Methods of amusement tax levying
- Voluntary tax declaration/payments
- Assessed levy
- Interim public performance - consisting of paid interim public performance and free interim public performance
2. Incentives on the Amusement Tax
- Amusement Tax collectors (Collection agents) who pay the tax collected to the Treasury within the prescribed time limit shall be given by the competent authorities a pecuniary award as incentive equivalent to 1% of the amount of the tax paid. The above-mention pecuniary award shall be deducted by collection agents from the tax payable each time they make a tax payment.
- If the amusement tax deadline has been set on the 10th, no incentives will be awarded if the payment is made on the 11th. However, if the deadline happens to fall on a Saturday or public holiday, the 1% incentive will still be awarded if the tax payment is made on the following business day. If award debits are still made after the deadline, the agency will retroactively recall the incentive as required by law.
3. Amusement Tax exemptions
- All kinds of amusement provided by educational, cultural, public welfare, charitable institutions or organizations conformable to a public welfare corporation or a foundation under the General Provisions of the Civil Law or duly registered with competent authorities in accordance with other related laws or regulations, where the total proceeds are exclusively used by the said institutions or organizations.
- All kinds of amusement, where the total proceeds, after deducting necessary expenses, are used for disaster relief or military morale purposes, provided, however, that the deductible expenses shall not exceed 20% of total proceeds
- All kinds of amusements, cultural and recreational activities provided temporarily and free of charge for employees by institutions, organizations, privately-owned or publicly-owned enterprises, schools and other organizations.
- Outdoor theaters staged by the private sector as deity offerings, religious pilgrimages and national celebrations are exempt from the amusement tax.
An organizer that falls under the subheadings 1 and 2 stated in the preceding section is required to file a petition before the activities starts. To be eligible to qualify for the exemption status the applicant must file a conclusive report within five days after the events finished. Within the deadline all accounting records and admission tickets approved by governing authorities or proof of documents must be all turned in to tax collection authorities for tax exemptions. Tax from the event will be exempted after a satisfactory review.
4. Provisions on Amusement Tax Reductions
Taxpayers of the amusement tax are those who pay the prices to enjoy the amusement. Providers or sponsors of sites, equipment or activities for entertainment act as collection agents. Collection agents that have been authorized by the Executive Yuan's Council of Cultural Development and qualified as cultural and arts enterprises may allow the tax be reduced by one-half (as per provisions cited in Article 7 of the Measure for Exemption and Waiver of the Business Tax (VAT) and Amusement Tax by Cultural and Arts Enterprises) To qualify for this tax deduction, a collection agent is required to file for an approval of reduced tax levy with the "Executive Yuan's Council of Cultural Development" two months prior a scheduled performance. (where an exemption will be given to the Business Tax and one-half to the amusement tax) Before the activities or performance starts, bring the approved documents authorized by the "Executive Yuan's Council of Cultural Development" to tax collection authorities for tax reduction or exemption registration. After the event, bring all required documents on tax reduction or exemption previously issued by the governing authorities to a tax collection agency for tax deductions.
Part 2 Ways to protect your equity and avoid being penalized for erroneous filing:
1. Penalties to Amusement Tax collectors who failed to apply for registration on collecting Amusement Tax
Collection agents or an operator in the amusement industry who fails to apply for registration with competent authorities prior to the opening of business, relocation, removal, switching to a new business, reclassification, alteration, reorganization, merger, transfer of ownership, liquidation or closure, or suspension of business shall be liable to a fine of not less than NT$15,000 but no more than NT$150,000.
2. Penalties to Amusement Tax collectors who failed to collect, under-report, under-collect or provide fake reporting on Amusement Tax
Amusement tax collectors who refuse to execute the amusement tax collection or attempt to under-collect, under-report or provide forged reporting will not only face retroactive collection, but also be liable to a fine of five to ten times the amount of tax payable, and business operations may also be suspended.
3. Penalties to Amusement Tax collectors who fail to pay tax within the prescribed time limit.
Amusement tax collectors who fail to pay the amusement tax in full on or before the last payment date as designated on the tax payment notice; are subject to a late payment fee of 1%, and will be imposed for every two full days beyond the deadline. Those that failed to make tax payments within 30 days after the deadline, the matter shall be referred to the courts for enforcement.
4. Penalties to interim public performance who failed to register for a tax collection proceedings
An organizer staging an interim entertainment venue who fails to apply proper registration and tax collection proceedings will be punished by a fine of more than NT$1,500 but no more than NT$15,000, pending further punitive action by governing authorities.
Part 3 Check for under-reported tax and paying tax retroactively:
* Payment of all amusement tax if discrepancies should arise than contradicts a tax exempt status
A variety of entertainment/amusement venues staged by organizations, groups, social welfare organizations or foundation organizations, in which the revenue has not been entirely directed into the core business or it's staged for disaster relief or military morale purposes. If the essential expenditure should exceed 20% of the ticket revenue shall be subjected to a mandatory recall of repaying the entire sum of taxable amusement tax.
- Department：Planning Service Division
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