Why Should You Consider Withholdong Tax When Using AWS?
As businesses accelerate their digital transformation, AWS cloud services have become an essential resource for enterprises in Taiwan. However, because AWS is a foreign company, using its services may involve withholding tax under Taiwan’s regulations. According to Article 88 of Taiwan’s Income Tax Act, foreign companies providing electronic services (such as cloud computing and data storage) in Taiwan are subject to corporate income tax if the income is considered sourced from Taiwan. This tax is typically withheld by the Taiwanese buyer at a rate of 20%, as stipulated in Article 3, Paragraph 1, Subparagraph 10 of the Regulations Governing the Implementation of the Income Tax Act.
Impact of Withholding Tax on Businesses
The imposition of withholding tax increases operational costs for businesses, particularly for SMEs that frequently use AWS services. Consequently, finding legitimate ways to exempt or reduce this tax burden has become a key concern for many enterprises in Taiwan.
Reducing Withholding Tax via Invoice Issuance through Local Resellers
To avoid the burden of withholding tax, businesses can purchase AWS services through a local reseller in Taiwan. This approach offers several financial and tax advantages, such as receiving a local invoice, making payments in TWD, and eliminating the need to withhold 20% of withholding tax. By doing so, businesses can lower their operating costs and simplify their financial processes.
Six Benefits of Purchasing AWS Services Through a Local Reseller
Invoice for Expense Claims
Invoices issued by resellers come with a Unified Business Number (UBN), making them eligible for expense claims. AWS expenses can be listed as business costs, reducing your overall tax liability.
No Additional Fees
When purchasing AWS services through a reseller, no additional service or handling fees are typically charged. Costs are calculated based on actual usage, ensuring there are no hidden charges.
Domestic Transactions and TWD Payments
When buying AWS services directly from AWS, payments are often processed via credit card, classified as cross-border transactions, and do not include a local Taiwan invoice. This means businesses are responsible for withholding 20% of taxes. Using a reseller enables TWD payments under a domestic transaction model, exempting businesses from withholding tax and significantly reducing tax-related costs.
Flexible Monthly Billing
Resellers offer postpaid monthly billing, allowing businesses to use services first and pay within a standard 30-day term. This flexibility enhances cash flow management.
No Long-Term Contracts or Penalty Fees
Resellers generally do not require long-term contracts, offering a pay-as-you-go billing model. Businesses can adjust or terminate services at any time without incurring penalty fees, ensuring greater financial flexibility.
Exclusive Discounts
Some resellers offer volume-based discounts. When businesses reach a certain level of AWS usage, they can enjoy cost reductions, making cloud services even more cost-effective.
Why Choose Elite Cloud as Your AWS Reseller?
Elite Cloud is the ideal partner for businesses looking to procure AWS cloud services. As a professional cloud solution provider, Elite Cloud offers not only AWS invoice issuance services but also a wide range of services, including cloud computing, storage, hosting, databases, AI, big data, and more. Backed by a skilled technical team, Elite Cloud is committed to providing comprehensive technical support and cost-optimization services. Here are the key advantages of partnering with Elite Cloud for AWS services:
More Competitive Pricing
Thanks to large-scale procurement, Elite Cloud can provide AWS services at more competitive prices, helping businesses optimize their costs while enjoying premium cloud services.
Technical Support and Cost Optimization
Elite Cloud offers professional cloud solutions and a dedicated technical team that is always on standby to assist businesses. This ensures a seamless cloud experience, allowing companies to focus on core business growth without worrying about technical challenges.
Seamless Transition
Switching to Elite Cloud as your AWS reseller does not disrupt your cloud services. The only change is the billing entity, ensuring no downtime and maintaining the stability of your AWS environment.
Simplify Your Withholding Tax Burden with Elite Cloud’s AWS Invoice Issuance Services
With the increasing popularity of cloud services, issuing local invoices for AWS services through a reseller is not only an effective way to reduce withholding tax but also simplifies financial and tax processes. By choosing Elite Cloud’s billing and payment services, businesses can achieve greater transparency in AWS costs and optimize tax savings. Partnering with Elite Cloud is the best choice for improving financial efficiency while enjoying high-quality cloud services.