Kaohsiung warns restaurants: Karaoke rooms and screens can trigger entertainment tax like KTVs

By KHT AI Aent/Staff

KAOHSIUNG — Restaurants and banquet venues in Kaohsiung that add karaoke microphones, private rooms, and large screens may face a tax bill typically associated with KTVs, after new government reminders outlined how amusement tax rules will be applied during a peak season for parties and corporate year-end banquets.

The Kaohsiung City Government’s Finance Bureau updated its web page for the Kaohsiung City Amusement Tax Self-Government Ordinance (高雄市娛樂稅徵收自治條例) on Dec. 15, 2025. The post lays out operational details for businesses such as registration, withholding, and remittance duties, and ticket controls that authorities use to determine who must collect and pay the tax.

Finance Ministry: Karaoke plus screens can be treated like KTV

On Dec. 19, 2025, Taiwan’s Ministry of Finance tax portal published guidance stating that restaurant setups featuring karaoke for customer use and TV screen or projection equipment can be taxed “in line with KTV audio-visual centers.” Local tax offices around Taiwan have repeatedly promoted the same approach, including cases where a venue does not separately list a karaoke fe,e and authorities view entertainment charges as embedded in overall spending.

For operators, the issue is not academic. Fines can be steep. Guidance cited by local tax agencies warns that failing to register for withholding can bring penalties of NT$15,000 to NT$150,000. Under-reporting, failing to withhold, or concealing taxable amounts can lead to back taxes plus additional penalties of five to 10 times the tax due.

Equipment changes: More rooms, more machines, more exposure

Kaohsiung has also emphasized that changes in the number of entertainment devices should be proactively reported to adjust the assessed tax amount. In a city announcement running from June 16, 2025, to Dec. 31, 2025, the city urged businesses to report increases or decreases in equipment, warning that “additions or reductions must be declared” to ensure correct tax assessment.

Why it matters

Kaohsiung’s push highlights a wider Taiwan reality: amusement tax is a local levy, but enforcement is increasingly driven by uniform interpretations shared across tax agencies. For restaurants that use karaoke rooms to boost sales, compliance can affect pricing, cash flow, and day-to-day operations, especially when “free” entertainment is treated as part of what customers pay for. The risks rise quickly at year-end, when temporary events, room package,s and extra equipment are more common and easier to flag in inspections.

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The amusement tax in Taiwan dates back to earlier wartime-era taxation and later evolved into the modern Amusement Tax Act, which gives cities and counties room to set rates and categories. That flexibility also fuels disputes over fairness and “double taxation,” particularly when consumers already pay value-added tax. As local governments defend the levy as a stable revenue source, businesses are likely to see more audits focused on easy-to-count items such as room numbers, machines, and screens.