TAIPEI (Taiwan News)—Frequent online shoppers beware! Taiwan will roll out a new tax policy starting this September that will lower the tariff bar for imported goods shipped via oversea express delivery to NT$2,000 (US$66.37).
At the moment imported products purchased online with a value below NT$3,000 are exempt from tariffs, but the government aims to lower tariff bar to NT$2,000 by September.
Taiwan currently does not require online buyers of imported goods to pay tariffs or value-added tax (VAT) , but charges buyers of online domestic goods 5 percent VAT which is unreasonable and unfair to domestic online businesses, said Deputy Minister of Finance Su Jain-rong (蘇建榮).
Additionally, the new policies were rolled out to prevent a small group of importers from long-term tax evasion and unfair import advantages that are impacting legal import traders, said Ministry of Finance officials.
The particular group of importers often reassembles large packages into smaller packages to lower the product value, and constantly import the resized packages into Taiwan.
These persistent importers account for only five percent of total imported good recipients, but the volume of imported items amount to nearly 36.4 percent of total imports, which places legal import traders at a disadvantage.
To level the playing field for domestic and international online businesses, the government is introducing a new tariff for oversea online purchases in two phases to gradually lower the tariff threshold below NT$2,000.
The first phase to be rolled out on July 1 this year will be targeting “frequent online importers” which is defined by Taiwan Customs Administration as persons who are making more than two online purchases per month, or importing items more than six times within half a year.
Smartphone numbers might be used to identity and trace the recipient to ensure it is the same person making high volume overseas online purchases, said the ministry officials.
The first half of the year recorded by customs will start from January 1 to June 30, and the second half of the year from July 1 to December 31.
By the second phase the policy will follow the concept of “limiting imports to low priced products,” which will lower the bar for tariffs and VAT placed on online purchases from over NT$3,000 to NT$2,000 by Sept. 1, 2017.
The policy, which was intended to go live by May 1, has been met with widespread objection from locals, and the Ministry of Finance received more than 500 messages from the public that resulted in the extension of the evaluation period.
Based on statistics compiled by the ministry, more than 21 million items by express mail from oversea worth NT$3,000 and below were imported into Taiwan, and nearly 20 percent of these products after tax were valued between NT$2,000 to NT$3,000 bringing the total amount of affected goods to nearly 4 million.