The Amusement Tax is a component of Taiwan’s local tax system, specifically levied on various fee-based entertainment activities, encompassing a wide range of forms such as films, dramas, singing, dancing, sports competitions, and recreational activities. Its purpose is not only to increase local fiscal revenue but also to regulate the development of the entertainment market to a certain extent. However, different types of entertainment activities are subject to varying tax rates, and some public welfare or cultural activities may enjoy tax exemption benefits. Understanding the scope of application and the method of calculating the Amusement Tax is crucial for both operators and consumers
About Amusement Tax
The Amusement Tax is a special sales tax levied on specific entertainment venues, facilities, or activities based on the ticket price or fees collected. A key distinction between the Amusement Tax and other taxes is that the taxpayer is the person who pays for the entertainment, but the tax is collected on their behalf by the operators or organizers of the entertainment venues, facilities, or activities.
Scope of Taxation
- Movies.
- Professional singing, storytelling, dancing, circus, magic, and performance arts (including juggling, skating, crosstalk, drum ballads, storytelling with musical accompaniment, ventriloquism, and various other entertainment performances) and various performances at nightclubs.
- Drama, musical performances, and non-professional singing, dancing, and other performances.
- Various competitive events (including various ball games, swimming, martial arts, shooting, combat sports, racing, horse racing, and other entertainment competitions).
- Dance halls or nightclubs.
- Golf courses and other entertainment facilities provided for public entertainment (including electronic game machines, video games, information leisure industry, restaurants or motels with karaoke, MTV, KTV, motor yachts, powered aircraft, water shows, hovercraft, racetracks, artificial waves, lazy rivers, paintball shooting ranges, electric pinball machines, crane machines, electric rocking horses (cars), entertainment-oriented vending machines, virtual reality entertainment facilities, motorized amusement facilities, and other entertainment facilities).
If the various entertainment venues, facilities, or activities mentioned in the preceding paragraph do not sell tickets but provide entertainment to patrons through other beverages or entertainment facilities, the Amusement Tax shall be levied based on the fees charged.
Methods of Amusement Tax Collection
Self-Assessment and Payment:
The Amusement Tax withholding agent calculates the tax payable based on the monthly ticket sales or fees collected for entertainment tickets, according to the tax rates stipulated by each county or city.
They then complete the Amusement Tax Self-Assessment Payment Form and file and pay the tax to the local tax collection agency by the 10th of the following month.
Assessment Taxation:
The monthly Amusement Tax to be withheld by the Amusement Tax withholding agent is determined by the local tax collection agency.
The payment form is completed and delivered to the withholding agent before the end of the month, and payment is due by the 10th of the following month.
Temporary Performances:
Priced Temporary Performances
For temporary entertainment activities that sell tickets or charge fees, regardless of the venue, the business operator or performer must apply to the local tax collection agency in their jurisdiction for ticket verification and Amusement Tax exemption procedures before the event.
The local tax collection agency in the jurisdiction calculates the withheld tax amount by period, with each period being 5 days of performance, and issues a payment form for the withholding agent to pay.
Within 5 days after the end of the performance, the withholding agent must return the remaining tickets to the local tax collection agency and complete the closing procedures.
Unpriced Temporary Performances
For temporary entertainment activities that do not charge any fees, notification to the local tax collection agency in the jurisdiction is required before the event.
Scope of Tax Exemptions
(a) Educational, cultural, public welfare, and charitable organizations or groups that are organized as public welfare associations or foundations under the General Provisions of the Civil Code, or that have been registered or established with the competent authority in accordance with other relevant laws, for various entertainment activities they hold, where all income is used for the purposes of the organization.
(b) Various entertainment activities where all income, after deducting necessary expenses (which shall not exceed 20% of the total income), is used for disaster relief or military support.
(c) Temporary cultural and recreational activities held internally by agencies, groups, public or private enterprises, schools, and other organizations that do not charge fees in any form.
Conclusion
The amusement tax is an important source of revenue for Taiwan’s local governments, helping regulate the market and promote fair competition by taxing various entertainment activities. Different types of entertainment are subject to different tax rates, while public welfare, educational, or government-sponsored events may qualify for tax exemptions. For businesses, complying with tax declaration and payment regulations ensures smooth operations and avoids penalties. For consumers, understanding the existence of the amusement tax helps in comprehending ticket pricing and overall entertainment costs. As the industry evolves, future adjustments and reforms to the amusement tax will remain a significant topic of interest.
