Taiwan is characterized by a dynamic capitalist economy characterized by diminishing guidance of investment and the foreign environment by the designated government authorities. Industrialization is primarily being propelled by exports, and this has paved way for pro forma invoices in Taiwan. The requirements for a Pro-forma invoice in Taiwan are that they should be used in offering preliminary product price quotation, before the actual sale of that specific product.
Additionally, the invoice is used to provide potential buyers with additional details on products. It is also very important when dealing with export and import businesses to be clear of the currency to use, because of varying forex exchange rates.
Pro-forma invoices primarily contain information as that contained in a formal quotation, as it is supposed to give the buyer as much information about the order as possible so that arrangements can be made efficiently. It is required in Taiwan that a Pro-forma invoice should inform the buyer and the appropriate import government authorities details of the future shipment changes, should that one happen without the buyer’s consent.
In Taiwan, some customers have a close working relationship with the suppliers to the extent that they are tasked with the responsibility of sharing the responsibilities of invoicing. In Taiwan, self-billing has been considered as a commercial arrangement between a supplier and a customer in which the customer prepares the supplier’s invoice and forwards a copy to the supplier with the payment. The supplier is given the responsibility of coming up with the invoice because the supplier is unable to determine the value of the supply.
For example in Taiwan, tobacco manufactures issue tax invoices to growers who supply tobacco leaves. Since the buyer knows the open market value of the tobacco leaves, they are better placed to provide the necessary information on the value of the product and will, therefore, issue the self-billed invoice.
It is a requirement in Taiwan that a self-billed invoice is issued under a written agreement between the buyer and the supplier and the buyer has to agree to issue self-billed invoices for all supplies made by a supplier for a specified period which shall end not later than either the expiry date of a period of 12 months or the expiry date contract between the buyer and supplier.
Progress Billing Invoice
In Taiwan progressive invoices are prepared to obtain a portion of the total payment of a specific project from your clients subject to terms and conditions agreed upon in the contact. They are very common in organizations that normally take long-term projects and the duration to finish the project lasts longer considering the nature of the project.
The project in the contract is divided into different milestones, and once the millstones are completed, or a certain percentage of the project accomplished, the contractor is under obligation to issue an invoice pertaining to the amount agreed on when starting the contract. On another level, clients also withhold a portion of the amount to be paid until completion of the project to build up pressure on the contractors so that the projects are finished in time.
Most contractors in Taiwan prefer this form of billing as the contractor has working capital all through the project and on completion of the project the contractor gets paid the last installment, which is either his profit or capital to invest in another project that the contractor will take up.
In Taiwan, it is required of a contractor that once a project has been successfully completed, then the client is notified to pay either for the goods delivered or service rendered. This acts as a demand for payment to be effected since the client has executed his part of the bargain according to the agreement the two had.
It normally has a description of the products and services that were included in the project, the total cost incurred, the due date for the payment to be effected, and the mode of payment. In Taiwan, it is required that final invoices are sent electronically, and if in the paper form they should be scanned so that the sent document is in soft copy due to their urgency.