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September 11, 2019

Taiwan issues new VAT ruling for transfers of renewable energy certificates

Taiwan’s Ministry of Finance issued Tax Ruling No. 1080054900 (the Tax Ruling) relating to Article 1 of the Value-added and Non-value-added Business Tax Act (the VAT Act) on 26 August 2019. The Tax Ruling states that the transfer of renewable energy certificates (RECs) should be treated as a sale of services, resulting in the transaction being subject to value-added tax (VAT). The Tax Ruling applies to all transfers of RECs, including transfers occurring prior to the release of the Tax Ruling.

  • RECs held by renewable energy generators and users of power from onsite renewable facilities1 may be transferred to a third party but the transfer is subject to VAT under Article 1 of the VAT Act.
  • A REC includes certain valuable rights and is not limited merely to a proof of renewable energy utilization; accordingly, the transfer of a REC is treated as a sale of services, subject to a 5% VAT.
  • Failure to file a return and pay VAT on any REC transfer is generally subject to penalties; however, such penalties may be waived provided that the VAT liability is paid by 15 November 2019.
  • Business entities engaging in the renewable energy industry and transferring RECs should review the REC transfer compliance and payment requirements and take actions to correct such noncompliance and/or payment to eliminate potential penalty assessment.


1. They are also owners of the facilities and generate the power for their own use.

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Taiwan), Taipei
  • Sophie Chou |
  • Anna Tsai |
  • Chien-Hua Yang |
  • Vivian Wu |
Ernst & Young LLP (United States), Asia Pacific Business Group, New York
  • Chris Finnerty |
  • Kaz Parsch |
  • Bee-Khun Yap |



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