National Taxation Bureau of the Southern Area, Ministry of Finance stated that in order to broaden the export trade, profit-seeking enterprises often pay the commission to get the assistance from the foreign agents or distributors to compete for the purchase orders. As a result, when declaring the commission as an expense, enterprises need not only the documents of payment, but also evidence of the fact of brokering.
The Bureau further indicated that the expenditure considered as an expense or loss shall be linked to the operating activities. In addition to agreements and the certificates of remittance, enterprises shall provide documents that are sufficient to prove that the payee has in fact offered the service of brokering or assistance to complete the deal and that the expenditure is firmly connected to operating activities, such as inquiring and quoting about the prices during a negotiation, and order settlements between the parties involved through any paperwork, email, Line, or WeChat. Moreover, if the payee of the foreign commission is an export manufacturer, employee of the said manufacturer, a foreign dealer, or another foreign manufacturer importing goods directly from the aforesaid export manufacturer, the expenditure of the commission will be excluded from the expense according to Article 92 of the Regulations Governing Assessment of Profit-seeking Enterprises Income Tax.
The Bureau would like to remind enterprises to keep the relevant original trade documents securely as the evidence to maintain their rights and interests.
Press Release contact: Mr. Tsai
First Examination Division
TEL: 06-2223111 ext 8032