When goods clear Taiwan customs, the 5% business tax (營業稅, Taiwan's VAT) is worked out last, on a base that already contains the other charges: customs value plus import duty plus any commodity tax (Business Tax Act, Article 20). A refrigerator pays business tax on its own commodity tax.
All of it is paid in one place. Customs collects the duty (Customs Act, Article 4) and also collects business tax and commodity tax on imports (Business Tax Act, Article 41; Commodity Tax Act, Article 23, paragraph 2). The trade promotion service fee (推廣貿易服務費) sits on the same payment certificate and is collected with the import duties (Enforcement Rules of the Foreign Trade Act, Article 17, paragraph 2).
The taxpayer is whoever the shipping documents name
Article 6 of the Customs Act lists three possible duty payers: the consignee (收貨人), the holder of the bill of lading or delivery order (提貨單), and the holder of the goods. Import business tax is owed by the consignee or holder of the imported goods (Business Tax Act, Article 2, item 2), and "consignee" means the one named on the 提貨單 or the import manifest (Enforcement Rules, Article 3). Commodity tax on imports falls on the same group, at the time of import (Commodity Tax Act, Article 2, paragraph 1, item 3).
So when a Taiwan subsidiary or distributor appears as consignee, that company is the taxpayer. Who carries the cost in the end is for the sales contract to settle. Entity options are covered in Setting Up a Company in Taiwan.
For an exporter with no fixed place of business in Taiwan, business tax on goods is collected at the border. In a 1991 ruling the Ministry of Finance said such a foreign company's sales of goods into Taiwan are handled under Article 41, by customs at import, and its services under Article 36 (MOF ruling of June 19, 1991).
Fifteen days to declare, fourteen to pay
The import declaration is due within 15 days from the day after the carrier arrives (Customs Act, Article 16, paragraph 1). Miss it and a late-declaration fee of NT$200 a day runs; after 20 days of fees without a declaration, customs sells the goods (Article 73). The owner of the goods may file itself or use a licensed customs broker (報關業者) (Article 22, paragraph 1; Customs Administration FAQ). An invoice, a packing list and the other required documents go in with the declaration (Article 17, paragraph 1).
Payment comes next. Duty is due within 14 days from the day after the duty payment certificate (稅款繳納證) is served (Article 43, paragraph 1). Late payment adds a surcharge of 0.05% of the unpaid duty for each day, and after 30 days of surcharge customs sells the goods here too (Article 74).
Disagree with the classification or the customs value? The duty payer can apply in writing for re-examination (復查) within 30 days from the day after receiving the payment certificate (Article 45).
Customs value and the three tariff columns
Most duty is ad valorem. The tariff also has specific duties, charged by weight, and compound duties, where the higher of the two applies (Customs Administration FAQ, July 13, 2026). For ad valorem duty, the customs value (完稅價格) starts from the transaction value, meaning the price actually paid or payable for goods sold for export to Taiwan (Customs Act, Article 29, paragraphs 1 and 2). Unless already in the price, several costs are added: commissions, containers and packing borne by the buyer, royalties the buyer pays under the terms of the sale, freight and handling to the port of import, and insurance (paragraph 3). Customs calls the result CIF. Pricing between related companies raises valuation questions of its own.
Rates are set by the Customs Import Tariff, which the legislature enacts (Customs Act, Article 3). A Customs Administration FAQ dated July 15, 2026 explains that the tariff uses eight-digit HS-based codes and three rate columns. Column 1 is for goods from WTO members or from places that give Taiwan reciprocal treatment. Column 2 is for specified goods from specified least-developed or developing economies and from partners in a free trade or economic cooperation agreement with Taiwan. Everything else falls into column 3.
Neither the United States nor Vietnam is on that FAQ's column 2 list. Nor does either appear among the partners on the International Trade Administration's ECA/FTA portal, checked on October 7, 2026. Product rates can be looked up through the Single Window's tariff search (Customs Administration FAQ). Unsure of the code? The duty payer or its agent can ask customs for a written advance classification ruling before import (Customs Act, Article 21).
The US agreement signed in February 2026
US exporters have one development to watch. On February 12, 2026, TECRO and AIT signed an Agreement on Reciprocal Trade in Washington (Executive Yuan release; USTR press release). USTR's fact sheet says, "The Taiwan side will eliminate or reduce 99 percent of tariff barriers." Under its Article 7.5, the agreement enters into force the day after the last written notification that each side has completed its internal procedures. The Executive Yuan said it would send the agreement to the Legislative Yuan for review.
No official notice of entry into force appeared on the Executive Yuan's agreement site or the USTR pages checked on October 7, 2026. Check whether it is in force before pricing a shipment on its tariff schedule.
An earlier agreement is already in force. Under the first agreement of the U.S.-Taiwan Initiative on 21st-Century Trade, in force since December 10, 2024 (Office of Trade Negotiations), a US exporter or producer may itself apply for an advance ruling on classification, valuation or origin. Customs must decide within 150 days from the day after it receives the application or the information it requested (Customs Administration Q&A, December 2024).
Business tax at 5% and the input credit
Article 10 of the Business Tax Act sets the rate between 5% and 10% and leaves the actual rate to the Executive Yuan. Customs computes import business tax at 5%, according to its FAQ of July 9, 2026.
A Taiwan company that files under the general method pays output tax minus input tax (Article 15, paragraph 1), so for it this tax becomes input tax. The supporting document is the deduction copy of the customs business tax payment certificate (海關代徵營業稅繳納證扣抵聯), listed in Article 38 of the Enforcement Rules, paragraph 1, item 2. According to the National Taxation Bureau of Kaohsiung, these certificates go into the return for the period covering the month of payment (notice of June 2, 2020). One missed in that period can go into the next; after that, the business must give reasons, and the limit is ten years (Enforcement Rules, Article 29).
Some purchases never qualify. Items barred by Article 19, such as passenger cars for the company's own use, stay non-creditable even when imported. Return deadlines and invoices are covered in Business Tax for a New Taiwan Subsidiary.
Commodity tax: seven product groups
Commodity tax reaches only seven groups: rubber tyres, cement, beverages, flat glass, oil and gas products, electrical appliances, and vehicles (Commodity Tax Act, Articles 6 to 12). Domestic and imported goods are taxed alike (Article 1). For imports, the taxable value is the customs value plus import duties and levies (Article 18). Even where duty is exempted, the exempted amount is still added (Regulations for the Collection of Commodity Tax, Article 55, paragraph 2).
These rates come from the text in force in October 2026. Refrigerators pay 13%. Air conditioners pay 20%, or 15% for central systems (Article 11); the current text of that article took effect on January 1, 2026. Passenger cars of up to 2,000 cc pay 25% (Article 12).
The 0.04% trade promotion fee
Under Article 21 of the Foreign Trade Act, the trade promotion service fee is capped at 0.0425% of the price of the goods. The rate actually charged, as of October 2026, is 0.04%, according to the International Trade Administration (ITA FAQ). For imports the base is the customs value (Article 21-1, item 2). Fees of NT$100 or less are not collected. A product that is duty-free only because its tariff rate is zero still pays. Bonded goods moving in or out of bonded facilities, except those released for sale in Taiwan, and certain free trade zone flows are on the exempt list (MOEA notice of February 2, 2024).
Worked through: NT$1 million of refrigerators
Take a shipment of refrigerators with a customs value (CIF) of NT$1,000,000. The 10% duty rate is invented for illustration; the real rate depends on the product's tariff code.
| Charge | Calculation | NT$ |
|---|---|---|
| Import duty | 1,000,000 × 10% (invented) | 100,000 |
| Commodity tax | (1,000,000 + 100,000) × 13% | 143,000 |
| Business tax | (1,000,000 + 100,000 + 143,000) × 5% | 62,150 |
| Trade promotion fee | 1,000,000 × 0.04% | 400 |
| Total | 305,550 |
Commodity tax beats the duty here. The border bill comes to NT$305,550, and the NT$62,150 of business tax in it becomes input tax for a general-method business holding the customs certificate.
To work out who should be the consignee and how the shipping documents and sales contract fit together, email Hovering International Law Firm at wei@hoveringlaw.com.tw with the product and trade terms.
The clock starts when the carrier arrives. The declaration is due 15 days from the next day, and duty 14 days from the day after the payment certificate is served. The business tax credit begins in the return for the month of payment.
Official sources
- Customs Act (關稅法, last amended May 11, 2022), Art. 3, Art. 4, Art. 6, Art. 16, Art. 17, Art. 21, Art. 22, Art. 29, Art. 43, Art. 45, Art. 73, Art. 74
- Customs Import Tariff (海關進口稅則, last amended January 28, 2026)
- Value-added and Non-value-added Business Tax Act (last amended May 28, 2025), Art. 2, Art. 10, Art. 15, Art. 19, Art. 20, Art. 41
- Enforcement Rules of the Value-added and Non-value-added Business Tax Act (last amended December 17, 2024), Art. 3, Art. 29, Art. 38
- Commodity Tax Act (貨物稅條例, last amended December 30, 2025; Article 11 text in force since January 1, 2026), Art. 1, Art. 2, Art. 6, Art. 7, Art. 8, Art. 9, Art. 10, Art. 11, Art. 12, Art. 18, Art. 23
- Regulations for the Collection of Commodity Tax (貨物稅稽徵規則, last amended August 18, 2026; Article 55 as amended February 23, 2023), Art. 55
- Foreign Trade Act (last amended December 25, 2019), Art. 21, Art. 21-1; Enforcement Rules of the Foreign Trade Act (last amended November 6, 2023), Art. 17
- Customs Administration, Ministry of Finance, FAQs: charges on imports (July 13, 2026), import business tax (July 9, 2026), customs brokers (July 8, 2026), tariff lookup (July 15, 2026), tariff columns (July 15, 2026); Q&A on the U.S.-Taiwan trade agreement's customs procedures (December 2024)
- International Trade Administration, Ministry of Economic Affairs, trade promotion fee FAQ and Taiwan ECA/FTA portal; MOEA notice 經貿字第11350200210號 on fee exemptions, Executive Yuan Gazette, February 2, 2024
- National Taxation Bureau of Kaohsiung, notice on import tax certificates (June 2, 2020)
- Ministry of Finance ruling 台財稅第800192374號 on sales of goods or services by foreign enterprises without a fixed place of business (June 19, 1991)
- Executive Yuan, U.S.-Taiwan tariff site releases (signing release of February 13, 2026) and agreement text page; Office of Trade Negotiations, first agreement under the 21st-Century Trade Initiative in force (December 10, 2024)
- USTR, press release (February 12, 2026), fact sheet (February 2026), agreement text
- Official English titles checked at law.moj.gov.tw/ENG
Checked: October 7, 2026
Frequently Asked Questions
- Who pays Taiwan import duty and business tax, the US or Vietnamese exporter or the Taiwan buyer?
- Taiwan law makes the consignee, the holder of the bill of lading or delivery order, or the holder of the goods liable for duty (Customs Act, Article 6), and the consignee or holder of the goods liable for import business tax (Business Tax Act, Article 2, item 2). Whoever is named as consignee on the shipping documents is therefore the taxpayer. Who bears the cost in the end is a matter for the sales contract.
- Does the US-Taiwan Agreement on Reciprocal Trade already lower Taiwan's tariffs on US goods?
- TECRO and AIT signed it on February 12, 2026, and USTR says the Taiwan side will eliminate or reduce 99 percent of tariff barriers. It enters into force the day after the last written notification that internal procedures are complete. No official notice of entry into force was found on the pages checked on October 7, 2026, so confirm its status before relying on its tariff schedule.
- Can our Taiwan subsidiary credit the business tax paid at customs?
- Yes, if it files under the general method. The customs business tax payment certificate (海關代徵營業稅繳納證扣抵聯) is a listed supporting document (Enforcement Rules of the Business Tax Act, Article 38, paragraph 1, item 2). It goes into the return for the period covering the month of payment; a missed certificate can go into the next period, and after that only with reasons and within ten years (Article 29). Items barred by Article 19 of the Act, such as passenger cars for own use, are not creditable.
This article provides general information and is not legal advice on any individual matter.
