According to Globe News Wire, the e-commerce scene in Taiwan is forecast to grow by 48.1% annually, reaching a value of US$1,661.1 million in 2022. The country mainly imports electronics, mineral products, machinery, chemicals, and base metals. An article published by Focus Taiwan stated that in March 2022, imports increased 20.3% to US$38.85 billion. This has increased the country’s total imports in the first quarter to US$105.46 billion.
According to Taiwan's Foreign Trade Act, any company registered with the Bureau of Foreign Trade (BOFT) is allowed to export or import goods. If you want to ship your goods to Taiwan, bear in mind that your goods may be subject to Taiwan's import tariffs as per the shipment’s value. If you are planning on importing goods into Taiwan, it is important to be aware of Taiwan's import tax and the import duty rate that will apply to your goods.
Taiwan imposes duties on imported goods, the amount of which depends on the tariff code of your product. In addition, Value Added Tax (VAT) of 5% is levied on most goods. Taiwan’s import duty on goods is calculated using the cost, insurance, and freight (CIF) method, which means that the tax calculated is based on both the import value and the shipping costs. The rate of duty ranges from 0% to 30% of the amount of CIF. To calculate the amount of import tax, you can use the following formula: Import duty = duty rate x (value of goods + insurance costs + transport costs)
It’s important to know the import tax of the imported goods as it will affect your total landed cost of the goods. The following costs will affect the payment of the goods’ import tax:
Shipping costs: freight, packaging costs, and insurance of the shipment
Royalties and fees for licences
Charges for business commissions
Value of products or services provided by the buyer to the seller free of charge or at a reduced price to support the manufacture or sale of the imported goods for export
The profit the seller makes on the buyer's unwanted goods
In addition to import tax, other levies such as trade promotion tax, commodity tax, excise tax, and health welfare tax may also be imposed on imported goods.
Since January 2018, Taiwan has had a de minimis threshold of NT$2,000. A VAT of 5% must be paid for all goods exceeding this de minimis value.
Taiwan has three main import tariffs, namely general tariffs, preferential tariffs, and non-tariff barriers to imports.
As mentioned, Taiwan calculates import tax based on CIF. Under general tariffs, an importer must also pay 5% VAT and a trade promotion service fee of 0.04% of the CIF amount. Additional taxes that the importer may have to pay include commodity tax, tobacco and alcohol tax, port duty, and luxury tax of 10%.
Certain goods are exempt from VAT, these include goods supplied for export, goods sold in duty-free shops, etc.
Under free trade agreements, importers can apply for preferential tariffs. Certain goods from Panama, Paraguay, Guatemala, Honduras, Eswatini, New Zealand, Nicaragua, El Salvador, and Singapore are exempt from Taiwan’s import tax. Certain goods from China which are listed in the Economic Cooperation Framework Agreement (ECFA) benefit from preferential tariffs, while goods from the least developed countries are exempt from tariffs.
It is prohibited to import certain products into Taiwan, some of these include products that will pose a threat to the environment and/or are of advanced strategic technology. Goods that come from certain embargoed countries are also prohibited from importation.
Shipping overseas can be daunting, especially if it is for the first time. Working with a trusted and experienced logistics company will help minimise discrepancies and avoid delays in customs clearance by helping you simplify shipping documentation, as they are equipped with the necessary knowledge to assist you in all your queries regarding import duty and taxes in Taiwan.