How Is Import Duty Calculated in Taiwan? Customs Value, Duty and Import Business Tax (with Worked Example)

Formulas

Item	Formula	Legal basis
Customs value	Transaction value + freight, insurance, commissions and other required additions	Customs Act, Article 29
Import duty	Customs value × duty rate	Per tariff classification
Import business tax	(Customs value + import duty + commodity tax, etc.) × business tax rate	Business Tax Act, Article 20

What Must Be Added to Customs Value?

Under Article 29 of the Customs Act, if the price actually paid or payable does not include the following, they must be added to the customs value (excerpt):

1. Commissions, fees, containers and packing costs borne by the buyer
2. A reasonable apportionment of materials, tools, molds and the like supplied by the buyer free or at reduced cost for production
3. Royalties and license fees the buyer pays as a condition of sale
4. Proceeds of the buyer’s use or disposal of the goods paid or payable to the seller
5. Freight, loading, unloading and handling charges to the port of importation
6. Insurance

So if you import on an FOB price, ocean freight and insurance must be added at declaration.

Worked Example (Hypothetical Numbers)

Note: the numbers below are hypothetical to illustrate the formulas and do not represent the rate of any actual product.

Assume a shipment with:

• FOB price: NT$100,000
• Ocean freight: NT$8,000
• Insurance: NT$500
• Assumed duty rate: 10%
• Business tax rate: 5% (assuming no commodity tax applies)

Step	Calculation	Amount (NT$)
Customs value	100,000 + 8,000 + 500	108,500
Import duty	108,500 × 10%	10,850
Business tax base	108,500 + 10,850	119,350
Import business tax	119,350 × 5%	5,967.5
Total taxes	10,850 + 5,967.5	16,817.5

Three Factors That Determine Duty

1. Tariff classification: sets the rate; see What Is an HS Code?
2. Country of origin: different origins may get different rates, preferential duties or anti-dumping duties; see What Are Rules of Origin? and What Is Anti-Dumping Duty?
3. Customs value: freight, insurance, commissions and so on must be added as required.

Other countries may use a different valuation basis (some use FOB), so when exporting, check the importing country’s rules.

How Tang Sugar Can Help

Tang Sugar’s international sourcing agent service helps assess fair prices and purchase terms before buying. Overseas customers buying from Tang Sugar can also ask a customs broker in their country to estimate landed cost from the tariff classification and origin. Contact us.

FAQ

How is import duty calculated in Taiwan?

For ad valorem goods, import duty = customs value × duty rate; customs value is based on the transaction value plus freight and insurance to the port of importation.

Is customs value based on FOB or CIF?

Under Article 29 of Taiwan’s Customs Act, customs value includes freight, handling charges and insurance to the port of importation, so in practice it is close to CIF.

How is import business tax (VAT) calculated in Taiwan?

Under Article 20 of the Business Tax Act, import business tax = (customs value + import duty, plus commodity tax where applicable) × business tax rate.

How do I look up Taiwan’s duty rates?

Use the goods’ tariff classification to search the Customs Administration’s tariff database (on the Customs-Port-Trade Single Window), and check whether the origin qualifies for preferential or special duties.

How is import duty paid in Taiwan?

At import declaration, customs assesses duty and import business tax, which are then paid, usually through the customs broker or online as permitted by the Customs Administration. Goods are released only after payment.

Further Reading

• What Is an HS Code?
• What Is an Import Agent Service?
• What Is DDP?

Sources

• Laws & Regulations Database of Taiwan: Customs Act (Article 29)
• Laws & Regulations Database of Taiwan: Value-added and Non-value-added Business Tax Act (Article 20)