Sales of Tungsten Steel and Other Waste in Taiwan Are Subject to Business Tax

In the manufacturing process, wastes such as iron scraps and tungsten steel wastes are often produced. If such scraps are sold to get a profit, a unified invoice must be issued following the law and business tax must be reported, according to the information of the Taxation Bureau of the Central Area in Taiwan.

Take a recently discovered case in Taiwan Taxation Bureau of the Central Area as an example, the company A, which is engaged in the production of tungsten steel saw blades, often produces sporadic tungsten steel materials or defective products during the production process. However, when applying for profit business income tax from 2015 to 2018, sales of waste materials were never listed as revenue or cost reductions.

After checking the bank account of the person in charge of company A, it was found that less than 500,000 yuan of cash was frequently deposited. These funds are the income from the private sales of tungsten steel scrap. After an in-depth investigation, they involved no invoiced and underreported sales of 47.57 million yuan. In the end, it was approved to replenish the company A's business tax of more than 2.37 million yuan and punished it per law.

Tungsten is a remarkable strategic resource, which is used in numerous fields including incandescent light bulb filaments, X-ray tubes (as both the filament and target), electrodes in gas tungsten arc welding, superalloys, and radiation shielding. Tungsten's hardness and high density give it military applications in penetrating projectiles. Tungsten compounds are also often used as industrial catalysts. Tungsten metal has the advantages of high melting point, high hardness, and high density. It is one of the important raw materials for manufacturing, as well as an important and non-renewable scarce resource.

Considering the mining and consumption of global tungsten resources, as well as cost issues, recycling of waste tungsten resources has become one of the important sources of tungsten supply. According to previous data, 24% of the global tungsten supply comes from the recycling of tungsten end products.

Relevant officials in Taiwan indicated that manufacturing or processing industries often produce waste materials, not only high-priced tungsten steel but also steel plates, iron plate scraps, iron cutting, etc., which are subject to business tax.

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