AI API Expense Accounts for Taiwan Firms: Prepaid Credits
Information service, cloud or software fee? Covers prepaid AI API credits from payment to period-end, expense vs. input VAT, and accountant documents.
When a company prepays for a block of AI API credits, should the full amount be expensed in the month of payment, or first recorded as a prepaid expense? Look first at the rights purchased, the actual usage and the company's accounting policy, then choose the account. Whether the vendor is OpenAI, Claude or BazaarLink, the vendor name alone does not decide the journal entry.
This article covers four common classifications and the materials to give your accountant. It is an illustrative judgment, not an "AI API-specific account" designated by the Ministry of Finance.
Four common accounts, chosen by purpose
| Account name | When it applies | Confirm before paying |
|---|---|---|
| Information service fee | The company already has this account, and it covers external APIs or information services | Whether the account definition includes pay-per-use inference services |
| Cloud service fee | Existing cloud computing spending is concentrated in this account | Whether AI API fits the company's existing classification policy |
| Software usage fee | Usage rights for software or SaaS subscriptions | Whether it is a monthly fee, a seat fee, or a prepaid usage credit |
| Budget accounts such as operating expenses | Research projects or government procurement | Use of funds, reimbursable items and deadline |
If you only obtain AI inference results on a pay-per-use basis, you can treat "information service fee" as a starting point for discussion with your accountant. When the company already has a consistent cloud service classification, following the existing policy usually makes reconciliation easier. The account names in the table do not mean every company must use them, and they do not directly determine whether an expense can be recognized for tax purposes.
Prepaid credits: judge payment, usage and period-end separately
| Timing | Data to check | Direction of judgment |
|---|---|---|
| Top-up payment | Contract, credit rights, expiry and refund terms, actual payment receipt | Decide whether to record a prepaid expense first, and whether it complies with the company's other processing policies |
| Actual usage | Usage for the period, project or department purpose | Transfer to the corresponding expense according to company policy |
| Balance remaining at period-end | Usability, recoverability, remaining rights and planned use | Decide the asset classification of the remaining balance, and whether adjustment or impairment is needed |
"Credits with no expiry" only answers the question of expiry. It does not prove that the asset will never be impaired. The date a payment receipt is obtained is not necessarily the date the expense is recognized. If the company chooses to transfer expenses as they are used, it should be able to connect the opening balance, purchases during the period, usage during the period and the closing balance.
Actual journal entries, capitalization and materiality judgments should be confirmed by a CPA or bookkeeping professional. If the API is used to develop your own product, do not rule out an assessment of capitalization just because the service is billed per use.
Expense documents and input VAT are two separate questions
Receipts, commercial invoices, credit card payment proof and usage details each prove different things. An overseas receipt can help explain the expense, but it does not automatically become a document for claiming Taiwan input VAT. Conversely, the lack of a Taiwan uniform invoice does not by itself mean the expense cannot be recorded.
For overseas electronic services, you also need to confirm the buyer's status. The Ministry of Finance's B2B / government agency guidance distinguishes between natural persons and business operators or government and organizations, and explains the treatment under Article 36 of the Business Tax Act, along with conditions such as use for taxable supplies. Confirm the buyer and the purpose of use first, then decide the tax amount and filing arrangements.
If you need to organize supplier and payment documents first, see How to file AI API expenses for Taiwan companies.
Checklist of materials for the accountant
- The actual invoice / receipt or uniform invoice, and proof of payment.
- Buyer information, order number, payment currency, and the basis for foreign currency conversion.
- Usage for the period and business purpose; if allocation is needed, attach project, department or key identification data.
- Terms for credit expiry, refunds and usage rights, plus the remaining credit balance at period-end.
Rather than saying "this is a purchase of AI", it is more specific to say: "This purchase is for API inference credits. The actual usage during the period and the closing balance are attached. Please confirm the account, the timing of recognition and the tax treatment under company policy." Complete documentation is more useful than applying a seemingly standard account name.
Documents for purchases through BazaarLink
BazaarLink is operated by 集聯科技有限公司 (Unified Business Number 62232477). It can issue Taiwan electronic uniform invoices, both two-part and three-part. When the company needs a title and Unified Business Number, fill in the buyer details before paying, and choose a payment channel on the checkout page that is marked as supporting invoice issuance. For enterprise quotes or special reimbursement documents, contact sales first to confirm.
After keeping the payment documents and usage details, the company still decides the account and timing of recognition based on the substance of the transaction. The electronic uniform invoice does not replace that judgment, and it does not mean that any use can be deducted as input VAT.
Data verified: 2026-09-17. This article provides a general bookkeeping approach and does not replace accounting or tax advice on individual transactions.
FAQ
Must AI API costs be recorded under the information service fee?
Not necessarily. The information service fee can be a starting point for discussion, but the decision depends on the actual use, contractual rights and the company's account policy. The company's existing classification for cloud services or software usage may also apply.
Must prepaid API credits be fully expensed when paid?
Not based on the payment date alone. First confirm the purchased rights, actual usage, expiry and refund terms, then decide under company policy whether to record a prepaid expense first and how to transfer it to expense.
Does credit with no expiry date mean no impairment is needed?
No. Having no expiry date only addresses the expiry condition. At period-end, the usability, recoverability and remaining rights should still be assessed, and the accountant should confirm the classification, adjustment or impairment where necessary.
Can an overseas API receipt be used to claim Taiwan input VAT?
An overseas receipt can help support the expense, but it does not automatically become a Taiwan input VAT deduction document. Expense recognition, the buyer's eligibility, the purpose of the transaction and the tax treatment of cross-border electronic services should be confirmed separately.
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