In trouble: The Singapore based Agoda.com, one of Asia'€™s leading hotel-booking websites, is fined for more than NT$20 million (US$626,100) for not legally registering as a business in Taiwan and for failing to issue unified invoices.

The National Taxation Bureau of Taipei (NTBT) fined Agoda.com, one of Asia'€™s leading hotel-booking websites, for more than NT$20 million (US$626,100) for not legally registering as a business in Taiwan and for failing to issue unified invoices, the NTBT said Thursday.

The Singapore-based company had established an office in Taiwan under the name of its affiliated company, in order to expand its reach in the Taiwan market and build partnerships with domestic hotels, according to NTBT.

NTBT has charged the company for breaking the Business Tax Law and the Tax Collection Act, as well as for suspected tax evasion. Besides being required to register as a business, Agoda.com faces a penalty of more than NT$10 million dollars and twice the amount of underpaid tax, according to government officials.

A travel industry expert said the tax penalty leveled against Agoda.com is necessary to help put foreign and domestic companies on an equal footing, according to local media.

An NTBT official said websites without a regional branch in Taiwan do not need to pay business taxes.

However, the official stressed that in this case, Agoda.com had set up an office in Taiwan, hired employees to liaise with hotels, signed contracts with new partners, and provided help and services to cooperating hotels.

After deliberation, the bureau concluded that the Taiwan office is performing core business functions, and should be legally registered at a taxation bureau, according to the official.

Also, when Agoda.com closes entries at the end of an accounting period, the law requires that the company collects '€œinput documentary evidence'€ from its hotel partners, and issue unified invoices to the hotels according to the commission it received.

Businesses may be fined up to five times the amount of tax underpaid or evaded, or asked to shut down entirely, in more serious situations according to the Business Tax Law.

If international companies set up business branches in Taiwan, yet do not pay their required taxes, it would result in unequal competition between companies that play by the rules and those that do not, the NTBT emphasised.

It would go against the idea of social justice, and would damage public perceptions of the company, the bureau added.

With a rise in international hotel-booking websites serving the nation, the NTBT official said they would strengthen efforts in the future, to evaluate existing and potential online hotel booking companies. (+++)

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