Except as otherwise prescribed in Section 2 of this Chapter, business entities shall calculate the output tax based on all sales amounts of goods and services, in accordance with the tax rates prescribed in Article 7 or 10 and round to the nearest New Taiwan Dollar.
The output tax is defined as the amount of business tax to be collected in accordance with this Act by the business entity at the time of selling goods or services.

The amount of business tax payable or overpaid by a business entity will be the difference between the output tax in a tax period and the input tax in the same period.
The amount of business tax returned by a business entity to a purchaser due to sales return of goods or rebates allowed shall be deducted from output tax in the tax period when the return or rebate occurs. The amount of business tax refunded to a business entity due to such business entity's return of goods, or due to a rebate, shall be deducted from the amount of input tax in the tax period when such return of goods or rebate occurs.
The input tax is defined as the business tax paid by a business entity in accordance with the act at the time of purchasing goods or services.

If a business entity sells its used passenger car or motorcycle purchased from a person who is not required to file a tax computation under this Section, such business entity may calculate the input tax by the following formula:

Purchased cost of the used
passenger car or motorcycle
Input tax = －－－－－－－－－－－－－ × Applicable collection rate
1 + applicable collection rate

The business entity shall report the input tax as referred to in the preceding paragraph in order to deduct it from the output tax of the used passenger car or motorcycle in the same period in which it reports the sales amount of such passenger car or motorcycle. However, if the input tax of the used passenger car or motorcycle is higher than output tax of the aforesaid vehicle, the excess portion shall not be deducted.
When the business entity files the input tax as referred to in the first paragraph above, it shall provide relevant documents concerning the purchase of the aforesaid used passenger car or motorcycle.
The preceding paragraphs shall be applicable to cases not currently being assessed or pending final decision at the effective date of this amended Article.

The sales amount prescribed in Article 14 means the total consideration received from the sale of goods or services, including any charges collected by a business entity other than the sales amount of the goods or services sold, but not the business tax payable for that specific sale.
If the goods referred to in the preceding paragraph are subject to the commodity tax, the tobacco and alcohol tax, or the health and welfare surcharge on tobacco, the sales amount shall include the amount of the commodity tax, the tobacco and alcohol tax, or the health and welfare surcharge on tobacco.

In the event that a business entity sells goods or services at a price unreasonably lower than the market price, the competent tax authority may determine the sales amount based on the market price.

The sales amount of an international transport enterprise transporting outbound cargo or passengers from within the territory of the R.O.C. shall be calculated as follows:
1. Marine transport enterprise: total ticket fares or freight charges for outbound passengers or cargo accepted for transportation from within the territory of the R.O.C.
2. Air transport enterprise:
(a) passenger transportation: ticket fares from the point of embarkation within the territory of the R.O.C. to first-leg stations outside the territory of the R.O.C.;
(b) cargo transportation: freight charges for the entire trip for the cargo accepted for transportation. However, where an international air transport enterprise transships its outbound cargo en route to an aircraft of another international air transport enterprise due to route restrictions or other reasons, its freight shall be calculated upon the charges actually attributable to the portion made by the first enterprise.
First-leg stations outside the territory of the R.O.C., as provided in Subparagraph 2 (a) of the preceding paragraph, shall be prescribed by the Ministry of Finance.

In any of the following events, a business entity may not deduct the input tax from the output tax:
1. Where the supporting documents, as set out in Article 33 herein, for purchased goods or services are not obtained or kept in the manner required.
2. The goods or services purchased are not for the use of principal and ancillary business operation. However, this requirement does not apply to purchases made for the support of national defense, provision of morale services to the troops, or contribution to the government.
3. Goods or services for social relations purposes.
4. Goods or services rewarded to individual employees.
5. Passenger cars for personal use.
Business entities engaging solely in the business of tax-exempt goods or services as provided in Article 8, paragraph 1 herein may not apply for refund of the input tax.
When a business entity is prohibited from deducting a certain part of the input tax from the output tax because it engages on a concurrent basis in the business of tax-exempt goods or services provided in Article 8, paragraph 1 herein, or due to other provisions of this Act, the ratio and calculation method related to the non-deductible amount shall be prescribed by the Ministry of Finance.

The business tax on imported goods shall be calculated based on the total amount of the duty-paid value and import tariffs and at the tax rate provided in Article 10.
If the above-mentioned goods are subject to the commodity tax, the tobacco and alcohol tax, or the health and welfare surcharge on tobacco, the business tax shall be calculated based on the total amount prescribed in the preceding paragraph plus the commodity tax, the tobacco and alcohol tax, or the health and welfare surcharge on tobacco.

Enterprises engaged in banking, insurance, investment trust, securities, futures, commercial paper and pawnshops shall calculate their business tax based on their sales amount at the tax rate provided in Article 11. However, the business tax for pawnshops may be calculated by the competent authority upon the assessed sales amount.

The special food and beverage service enterprises under Article 12 shall compute the amount of their business tax based upon their sales amount at the tax rate provided in said Article. However, the competent tax authority may compute it based upon the assessed sales amount according to their investigation.

Consignees of the agricultural wholesale markets, small business entities selling agricultural products, other small business entities, massage enterprises run by visually impaired persons who have duly obtained qualifications to engage in massage operation, and entirely staffed with visually impaired persons to provide massage services, and other business entities exempted by the Ministry of Finance from reporting their sales amount, shall compute their amount of business tax based upon the amount of sales as assessed by the competent tax authority and at the tax rate provided in Article 13, except in the case that the business entity has applied to calculate the business tax under Section 1 of this Chapter and file tax returns in accordance with Article 35.

For enterprises engaged in banking, insurance, and trust investment, the sales amount from operations not within the scopes of their exclusively authorized business, as defined in the footnote of "Time Limit for Issuing Sales Documentary Evidence" of this Act, may apply to calculate business tax in accordance with the provisions in Section 1 of this Chapter and file tax returns in accordance with the provisions of Article 35.
Where application has been made in accordance with the preceding paragraph to calculate the amount of business tax under Section 1 of this Chapter, application may not be made for alteration for three years following approval.
The Ministry of Finance may gauge the nature and capabilities of small business entities and determine that Section 1 of this Chapter shall be applied to calculate business tax and Article 35 shall be applied to file tax returns and pay taxes.

When a business entity, whose business tax is assessed as prescribed in Article 23, purchases goods or services for business operation, obtains evidence stating amount of pertinent business tax, and files a return as required, 10% of input tax shall be deducted from the assessed tax amount by the competent tax authority. However, when the assessed tax amount is less than the minimum amount for assessment, this deduction shall not be applicable.
If, as provided in the preceding paragraph, 10% of input tax exceeds the assessed tax amount, the excess may be deductible in the coming period.

For consignees of the agricultural wholesale markets or small business entities which sell agricultural products, or other small business entities covered by Article 23 and other business entities exempted by the Ministry of Finance from filing tax returns, the minimum taxable sales amount shall be prescribed by the Ministry of Finance.

Section 1 of this Chapter, with the exception of Article 14, paragraph 1 of Article 15, and the proviso to paragraph 1 of Article 16, applies mutatis mutandis to the tax computation by a business entity under this Section.