How Is Import Customs Value Calculated? 6 Customs Valuation Methods and Royalty Addition Rules
Quick Answer: What Is Customs Value? Do Royalties Count?
Customs value is the price base Customs uses to calculate import duty and fees. Under Article 29 of the Customs Act, for goods subject to ad valorem duty, customs value is based on the transaction value (the price actually paid or payable for the goods when sold for export to Taiwan), plus the following costs if not already included: commissions and packing costs borne by the buyer, tooling and design provided by the buyer free of charge, royalties and licence fees paid by the buyer as a condition of the transaction, resale proceeds, and the freight and insurance to the port of importation in Taiwan. When the transaction value cannot be used, Customs applies, in order, identical goods, similar goods, deductive value, computed value and reasonable means — 6 methods in total; only the order of deductive value and computed value can be swapped at the taxpayer's request. A royalty must be added whenever it relates to the imported goods and is a condition of the transaction — this applies even when it is paid to a brand licensor other than the seller (Supreme Administrative Court Judgment 99-Pan-958); but fees paid to obtain the right to reproduce the goods in Taiwan are not included. If you disagree with the customs value assessed, you must apply for review within 30 days of the day after receiving the duty payment notice.
HowBridge operates only a Shenzhen consolidation warehouse and a Taoyuan operations warehouse, providing consolidation service only for China → Taiwan; we do not offer purchasing-agent services, advance rulings on valuation, or representation in administrative remedies. This page explains the customs valuation rules to help you include the right costs when you file your declaration.
What Does Customs Value Mean? Is It the Same as What I Paid?
Customs value is the price Customs uses to calculate duty. It is usually not the same as the price you saw at checkout: the law requires it to be based on the “transaction value,” then adjusted by adding or excluding certain costs. All three types of import tax and fees are calculated from it:
| Tax/Fee | How It's Calculated | Legal Basis |
|---|---|---|
| Customs Duty | Customs value × tariff rate for the HS code | Customs Act, Article 29 |
| Business Tax | (Customs value + duty + commodity tax, etc.) × 5% | Value-Added and Non-Value-Added Business Tax Act, Article 20; Customs Administration Q&A |
| Trade Promotion Service Fee | Customs value × 0.04%, waived if NT$100 or less | Trade Act, Article 21 (statutory cap of 4.25 per 10,000); Customs Administration Q&A |
Transaction Value = the Price Actually Paid or Payable for Export Sale to Taiwan
Customs Act, Article 29, Paragraph 2. “Payable” includes amounts not yet paid but owed under the contract. If Customs reasonably doubts the authenticity of the transaction documents and the doubt is not adequately explained, the transaction value is treated as unusable for assessment (same Article, Paragraph 5).
The Trade Promotion Service Fee Is Not Included in Business Tax
The business tax base is customs value plus duty (plus commodity tax where applicable); the trade promotion service fee is not part of that base. For imports with a customs value of NT$250,000 or less, the calculated trade promotion service fee does not exceed NT$100, so it is waived under the rule.
Which Costs Must Be Added to Customs Value, and Which Can Be Excluded?
The 6 items that must be added are set out in Article 29, Paragraph 3 of the Customs Act; the items that can be excluded are set out in Articles 11 and 12 of the Customs Act Enforcement Rules, and they must be separately identifiable (itemized separately on the invoice or contract).
| Cost | Treatment | Legal Basis |
|---|---|---|
| Commissions, brokerage fees, container and packing costs borne by the buyer | Add | Customs Act §29(III)(1) |
| Materials, components, tools, dies and consumable supplies provided by the buyer to the seller free of charge or at reduced cost, and engineering, development or design work performed abroad | Add (allocated on a reasonable basis) | Customs Act §29(III)(2) |
| Royalties and licence fees paid by the buyer as a condition of the transaction | Add | Customs Act §29(III)(3); Enforcement Rules §12(II) |
| Amounts paid or payable to the seller by the buyer after using or disposing of the imported goods | Add | Customs Act §29(III)(4) |
| Freight, loading and handling charges to the port of importation (including freight surcharges) | Add | Customs Act §29(III)(5); Customs Administration Q&A |
| Insurance | Add | Customs Act §29(III)(6) |
| Fees the buyer pays to its own overseas purchasing agent (buying commission) | Excluded | Enforcement Rules §12(I) |
| Fees paid to obtain the right to reproduce the imported goods domestically | Excluded | Enforcement Rules §12(II) proviso |
| Post-import construction, installation, assembly, maintenance or technical assistance costs | Excluded (if separately identifiable) | Enforcement Rules §11(I)(1) |
| Post-import transportation costs | Excluded (if separately identifiable) | Enforcement Rules §11(I)(2) |
| Interest on deferred payment | Excluded (if separately identifiable) | Enforcement Rules §11(I)(3) |
| Taiwan customs duty and taxes payable on the imported goods | Excluded | Enforcement Rules §11(I)(4) |
Customs Act, Article 29, Paragraph 4: costs to be added must be based on objective and quantifiable data; without such data, the transaction value is treated as unusable for assessment, and Customs moves to the next method in order. In a Customs Administration Q&A example, an electronic component has a contract unit price of US$10, plus a separate R&D fee of US$1 per unit — the customs value must be calculated using US$11.
What Is the Order of the 6 Customs Valuation Methods? Can You Choose?
No, you cannot choose. Articles 29 through 35 of the Customs Act set out 6 methods; the next method is used only when the previous one cannot be applied. This framework is consistent with the WTO Agreement on Implementation of Article VII of GATT 1994 (the Customs Valuation Agreement):
1Transaction Value (Article 29)
Based on the price actually paid or payable for the goods themselves, plus the costs in Article 29, Paragraph 3. The vast majority of imports use this method.
2Transaction Value of Identical Goods (Article 31)
The transaction value of goods from the same country of production, with the same physical characteristics, quality and reputation, sold for export to Taiwan within 30 days before or after the export date (Enforcement Rules §16).
3Transaction Value of Similar Goods (Article 32)
The transaction value of goods from the same country of production with the same function, similar characteristics and materials, and that are commercially interchangeable.
4Deductive Value / Domestic Selling Price (Article 33)
Worked back from the goods' selling price in Taiwan, after deducting the usual profit and expenses, import duties and taxes, and post-import freight and insurance.
5Computed Value (Article 34)
Production cost and expenses, plus the usual profit and general expenses, plus freight, loading/handling charges and insurance to the port of importation. Customs may, at the taxpayer's request, swap the order of Articles 33 and 34 (Article 33, Paragraph 2).
6Reasonable Means (Article 35)
When none of the first five methods can be applied, Customs uses reasonable means based on data it has obtained. Enforcement Rules §19 expressly prohibits 7 approaches, including: the selling price of domestically produced goods in Taiwan, taking the higher of two prices, the domestic selling price in the country of export, a minimum customs value set by Customs, and arbitrary or fictitious prices.
Customs Act, Article 36: the taxpayer may submit a written request asking Customs to explain the method it used to assess the customs value of the imported goods, and Customs must respond in writing.
When Must Royalties or Licence Fees Be Added to Customs Value?
Article 12, Paragraph 2 of the Customs Act Enforcement Rules defines a royalty as a payment made to obtain patent, trademark, copyright, or other intellectual property rights protected by law, that is related to the imported goods. Combined with the requirement in Article 29, Paragraph 3 that it be “paid by the buyer as a condition of the transaction,” that gives two tests:
| Scenario | Add or Not | Legal Basis |
|---|---|---|
| A trademark or patent licence fee paid to the seller, without which the goods cannot be purchased | Add | Customs Act §29(III)(3) |
| Paid to a brand licensor other than the seller, where the licence is a precondition for having a contract factory produce and import the goods | Add: not limited to payments made to the seller | Supreme Administrative Court Judgment 99-Pan-958 |
| An intra-group licence fee, without which the buyer would lose its supply source or sales channel | Add: treated as a condition of the transaction | Supreme Administrative Court Judgment 101-Pan-532 |
| Fees paid to obtain the right to reproduce (duplicate) the imported goods in Taiwan | Do not add | Enforcement Rules §12(II) proviso; WTO Agreement Note |
| Fees for distribution or resale rights, where they are not a condition of the export sale | Do not add | WTO Agreement Annex I Note (no word-for-word equivalent in Taiwan's statutes) |
| Fees unrelated to the imported goods (e.g., post-import technical assistance) | Do not add (if separately identifiable) | Enforcement Rules §11(I)(1) |
The Same Royalty Can Involve Both Income Tax and Customs Duty
Supreme Administrative Court Judgment 101-Pan-532 holds: for the business income tax on royalty income, the taxpayer is the party receiving the licence fee and the taxable object is the licence-fee income; for customs duty, the taxpayer is the importer and the taxable object is the imported goods — “the levy of business income tax and of customs duty each has its own statutory requirements.”
Consequences of Failing to Declare a Royalty
Under a 2008 (ROC year 97) Ministry of Finance order: if any cost listed under Article 29, Paragraph 3 was not included, Customs must adjust the customs value to include it and collect the additional duty; in principle no penalty is imposed under Article 37, Paragraph 1 of the Customs Anti-smuggling Act, unless forged, altered or false invoices or documents were submitted. A 2023-01-04 Ministry of Finance press release also warns that under-declaration can lead to delayed clearance in addition to the duty owed.
If Buyer and Seller Are Related Companies, Will Customs Reject the Transaction Price?
Not automatically. Under Article 30, Paragraph 1, Item 4 of the Customs Act, the test is that “the buyer and seller have a special relationship that affects the transaction value.” Paragraph 2 of the same Article lists 8 types of special relationship, such as serving as each other's directors, supervisors or officers, one party directly or indirectly holding 5% or more of the other's voting shares, both being controlled by the same third party, or being spouses or relatives within the third degree of kinship.
| Comparison | Customs Valuation | Income Tax Transfer Pricing |
|---|---|---|
| Competent Authority | Customs (Customs Administration, Ministry of Finance) | National Taxation Bureau (regulations administered by the Taxation Administration, Ministry of Finance) |
| Legal Basis | Customs Act §30; Enforcement Rules §14 | Income Tax Act §43-1; Regulations Governing Assessment of Non-Arm's-Length Transfer Pricing |
| Shareholding Threshold | Directly or indirectly holding 5% or more of voting shares (one of the criteria) | 20% or more for an affiliated relationship (one of the criteria) |
| Review Focus | Whether the special relationship affects the transaction value of the imported goods | Whether the controlled transaction complies with the arm's-length principle |
| Price Test | Treated as unaffected if the transaction value is close to the customs value determined for identical or similar goods, etc. (Enforcement Rules §14) | Arm's-length methods under the assessment regulations |
A Transfer Pricing Report Does Not Mean Customs Will Simply Accept It
The WCO Guide to Customs Valuation and Transfer Pricing explains that not every related-party transaction is examined — Customs examines the price only when it has doubts; a transfer pricing study can serve as reference material on a case-by-case basis. A Customs Administration officer, writing in Public Finance Review (2023), also noted that the WCO and most national customs authorities remain cautious about relying on transfer pricing documentation.
What If the Price Is Only Adjusted After Year-End?
Since 2020-01-01, the Customs Administration has applied the Directions for Customs to Assess Customs Value Following a One-Time Annual Transfer Pricing Adjustment: where a business's controlled transaction under a special relationship cannot have its price determined at the time of importation and requires a single adjustment after the accounting year ends, the business must apply for a customs value assessment within one month after the accounting year ends; late applications will not be accepted. The income tax treatment still follows Article 43-1 of the Income Tax Act (2019 (ROC year 108) Ministry of Finance order).
How Much Does Adding the Royalty Change the Tax? A Worked Example
Suppose a company imports a batch of licensed goods, with an assumed tariff rate of 10% (the actual rate depends on the HS code), and the goods are not subject to commodity tax:
| Item | Without Royalty Added | With Royalty Added |
|---|---|---|
| Price Actually Paid | NT$100,000 | NT$100,000 |
| Freight + Insurance | NT$8,000 | NT$8,000 |
| Royalty Paid as a Condition of the Transaction | — | NT$5,000 |
| Customs Value | NT$108,000 | NT$113,000 |
| Customs Duty (× 10%) | NT$10,800 | NT$11,300 |
| Business Tax ((Customs Value + Duty) × 5%) | NT$5,940 | NT$6,215 |
| Trade Promotion Service Fee (× 0.04%) | NT$43.2; waived if NT$100 or less: NT$0 | NT$45.2; waived if NT$100 or less: NT$0 |
| Total Tax and Fees | NT$16,740 | NT$17,515 |
The difference in this example is NT$775. If a royalty is omitted from the declaration, once Customs discovers it, it will adjust the customs value and collect the difference, and clearance may also be delayed. For the business tax and formal customs clearance process for company imports, see Company Imports: Business Tax, Import Duty and Formal Customs Clearance.
Can You Ask Customs in Advance Whether a Royalty Must Be Added Before Importing?
Yes. Under Article 36-1 of the Customs Act, an advance ruling on valuation lets the taxpayer or its agent apply to the Customs Administration, Ministry of Finance, before the goods are imported, for a ruling on whether there are any costs that must be added to the price actually paid or payable to form the customs value (such as a royalty). It rules on this single question only — it does not pre-determine the entire customs value.
1Prepare the Transaction Documents
Under the Customs Administration's operating rules, a royalty case must be accompanied by the licence agreement, the sale and purchase contract, and a statement of the relationship between all parties involved in the transaction.
2Submit the Application to the Customs Administration
The Regulations Governing Advance Rulings on the Valuation of Imported Goods (amended 115-01-23) require the application to be filed with the Customs Administration, which may delegate it to a subordinate agency. Hypothetical transactions and transactions not expected to occur within one year are not accepted.
3Receive a Written Reply
The Customs Administration replies in writing within 45 days of the day after all documents are received; if it must consult domestic or foreign institutions or experts, this may be extended to within 90 days.
4Declare According to the Ruling at Import
The ruling is valid for 3 years from the date the notice is issued. If you disagree with the ruling, you may apply for reconsideration before importing; if you still disagree with the reconsideration result, you must wait until the goods are imported and Customs has assessed the customs value, and then proceed through the administrative remedy procedure.
Which Rules Govern Advance Rulings on Valuation? Where to Apply, How Long It Takes, and When Applications Are Rejected
The legal basis is Article 36-1 of the Customs Act; the procedure is set out in the Ministry of Finance Regulations Governing Advance Rulings on the Valuation of Imported Goods (10 articles) and the Customs Administration Operating Directions, which designate Keelung Customs to receive applications. On 2026-10-06 the Customs Administration published “Make Good Use of Advance Valuation Rulings to Declare the Customs Value of Imported Goods Correctly”, warning that importers often omit costs that must be added, such as freight surcharges, and are later assessed additional duty. If you are unsure whether a cost must be included, you can apply before importing.
| Item | Rule | Legal basis |
|---|---|---|
| What is ruled on | Whether the price actually paid or payable contains costs that must be added to the customs value (Article 29(3) or other amounts actually paid or payable); it does not pre-determine the whole customs value | Customs Act §36-1 I; Regulations §2 |
| Who applies, and when | The taxpayer or its agent, before the goods are imported | Customs Act §36-1 I |
| Where to apply | By law, the Customs Administration, Ministry of Finance, which may delegate to a subordinate agency; the Operating Directions designate Keelung Customs | Regulations §3, §4; Operating Directions point 2 |
| Documents | Application form plus sales contract, commercial invoice, letter of credit, proof of payment or other necessary documents; the Operating Directions list further documents by type of cost | Regulations §4; Operating Directions point 3 |
| Deadline for missing documents | Within 30 days from the day after receiving written notice | Regulations §5 |
| Not accepted | Documents not supplemented in time; hypothetical transactions or transactions not to be carried out within one year; same issue as a dispute over identical or similar goods pending in administrative remedy; key information incorrect or false; other cases found unsuitable | Regulations §6 |
| Reply period | Written reply within 45 days from the day after the application or supplemented documents are complete; extendable to 90 days when domestic or foreign bodies or experts must be consulted | Regulations §7 |
| If you disagree | Apply to the Customs Administration for review before importation; notice within 20 days from the day after receipt. If you still disagree, wait until the goods are imported and the customs value is assessed, then use administrative remedies | Customs Act §36-1 III; Regulations §8 |
| Validity | 3 years from the date the ruling is issued (unless changed by the Customs Administration) | Regulations §9 |
| If the ruling is changed | It may be changed if information was incorrect or incomplete or valuation rules change; an applicant that has signed contracts and traded on the ruling may prove this and ask to keep the original ruling, for up to 90 days from the day after notice | Regulations §10; Customs Act §36-1 II |
| Importing while the ruling is pending | Customs may release the goods first under Article 18(2) of the Customs Act (documents submitted and a deposit of a corresponding amount paid, with review afterwards) | Operating Directions point 7; Customs Act §18 II |
Keelung Customs explained that commissions, brokerage fees, container and packing costs, engineering and design work supplied free or at reduced cost, royalties and licence fees, and freight and insurance to the port of importation listed in Article 29(3) must all be added if not already included. Applications need the sales contract, commercial invoice, letter of credit, proof of payment and similar documents; Customs replies in writing within 45 days from the day after the documents are complete, and the ruling is valid for 3 years. Forms are on the Customs Administration website under Services / Downloads / Forms / Import. Original: Ministry of Finance, Keelung Customs.
When Is an Advance Valuation Ruling Worth Requesting? Can It Cover Related-Party Prices?
If you pay anything beyond the price of the goods and are unsure whether it belongs in the customs value, apply before importing. But the ruling only answers “must this cost be added?”; whether a relationship affected the price, or a year-end transfer pricing adjustment, goes through other procedures. The document lists below come from point 3 of the Operating Directions:
| Situation | What the ruling can confirm | Documents required by the Operating Directions |
|---|---|---|
| Paying brand licence fees or patent or trademark royalties | Whether the royalty relates to the imported goods and is a condition of sale, so it must be added (§29 III item 3) | Explanation of the relationships between all parties, licence agreement, sales contract, orders and commercial invoices, letter of credit or proof of payment |
| Ordering through an intermediary or agent and paying a commission or fee | Whether it is a commission borne by the buyer (added) or a fee paid to your own buying agent (not added, Enforcement Rules §12 I) | Agency agreement or proof of agency, purchase orders and correspondence, sales contract, supplier invoices to the agent, payment documents, description of the intermediary’s services |
| Paying for moulds, or supplying designs or parts to the factory | Whether these assists must be added and how to apportion them (§29 III item 2) | List of assists and their costs, sales contract, commercial invoice, related correspondence, proof of payment |
| Freight surcharges, handling or insurance charged separately | Whether they are costs of transport to the port of importation (§29 III items 5 and 6) | Breakdown and proof of freight and insurance, sales contract, commercial invoice, proof of payment |
| Contract includes installation or technical assistance after importation | Whether it can be deducted from the price (Enforcement Rules §11 I) | Service contract, cost breakdown, evidence of whether it is included in the price, related correspondence |
| Buyer and seller are related companies | Outside the scope: whether the relationship affected the price is judged under Customs Act §30 and Enforcement Rules §14; you may ask Customs in writing to explain its valuation method under §36 | — |
| One-time transfer pricing adjustment after the fiscal year ends | Outside the scope: note the adjustment on the import declaration, declare a provisional price, and apply to Customs to assess the customs value within 1 month after the fiscal year ends | Under the Directions for Customs to Assess Customs Value Following a One-Time Annual Transfer Pricing Adjustment |
2026-10-22 Taipei National Taxation Bureau case: no Customs assessment, so the income tax adjustment was disallowed
Company A booked a one-time transfer pricing increase of NT$90 million in its cost of sales for tax year 112 (2023), but its contract had not agreed in advance on the “terms of the transaction” and “all factors affecting pricing”, and it had not applied to Customs within 1 month after the fiscal year to assess the customs value and pay import duties. The bureau disallowed the adjustment and assessed NT$18 million in additional tax. Customs and income tax procedures must be handled together. Original: Taipei National Taxation Bureau press release.
How advance valuation rulings are viewed internationally
Article 3 of the WTO Trade Facilitation Agreement requires members to issue advance rulings on tariff classification and origin and encourages rulings on the method or criteria for determining customs value under a particular set of facts (Article 3.9(b)(i)). The WCO’s June 2018 Technical Guidelines on Advance Rulings for Classification, Origin and Valuation say such rulings add certainty and predictability to international trade. Taiwan’s statute limits the ruling to “whether there are costs that must be added to the customs value”.
Importing from a Chinese Factory (B2B): Which Costs Should You Check Before Declaring the Customs Value?
List every payment to the factory, intermediaries, brand owners and logistics providers and check each against Article 29(3) of the Customs Act; for large, recurring costs you are unsure about, apply for an advance valuation ruling before importing. Four situations that come up often when importing from China:
Mould and tooling fees paid separately
Factories often quote mould and tooling fees separately. Tools, moulds and designs supplied by the buyer free or at reduced cost must be reasonably apportioned under Article 29(3) item 2; whether and how to add them depends on who is paid and what the contract says. Keep the contract, receipts and proof of payment, and seek a ruling if unsure.
Private-label or licensed goods
When a brand owner licenses a factory to make goods that the factory then ships to you, the royalty must still be added even if it is paid to the brand owner rather than the factory, as long as it relates to the imported goods and is a condition of sale (Supreme Administrative Court Judgment 99-Pan-958). The pricing and payment terms in the licence agreement are the key documents for a ruling.
Ordering through a trading company or buying agent
Fees paid to your own overseas buying agent are not added; selling commissions are. The agency agreement and invoices should show whom the agent represents; otherwise Customs may treat the fee as a commission to be added.
Freight surcharges and insurance
A Customs Administration FAQ states that freight surcharges must be included in the customs value whether paid by the importer or the foreign seller, and the 2026-10-06 press release lists them as a commonly omitted item. Keep the documents for international freight, surcharges and insurance and include them as required when declaring.
HowBridge operates only a Shenzhen consolidation warehouse and a Taoyuan operations warehouse and provides consolidation and customs clearance only for China → Taiwan; we do not handle advance valuation rulings. When you file a formal declaration in your company’s name, declare the value according to the rules above and keep contracts, invoices and proof of payment; whether a cost must be added is decided by the written reply of Customs or the Customs Administration.
How Do You Seek Remedy If You Disagree With the Customs Value Assessed by Customs? What Are the Deadlines?
The statutory term used is “application for review”. The sequence and deadlines are as follows:
| Stage | Deadline and Key Points | Legal Basis |
|---|---|---|
| Apply for Review | Within 30 days of the day after receiving the duty payment notice, apply in writing to Customs; the goods may be released first after paying the full duty or providing equivalent security | Customs Act §45 |
| Review Decision | Customs decides within 2 months of the day after receiving the application; this may be extended once, by up to 2 months, if necessary | Customs Act §46 |
| Administrative Appeal and Litigation | If you disagree with the review decision, you may file an administrative appeal and administrative litigation as provided by law; if a refund is finally due, it is refunded with daily interest added | Customs Act §47 |
Keep Your Documents
When Customs doubts the declared price, it must explain its reasons and give a reasonable opportunity to respond, and after making its assessment must deliver the reasons in writing together with the duty payment notice (Enforcement Rules §13). Invoices, proof of payment, the sale and purchase contract and the licence agreement are your most direct evidence when explaining your case or seeking remedy.
Terms Used on This Page
- Customs Value
- The price base Customs uses to calculate ad valorem duty, based on the transaction value and adjusted under Article 29 of the Customs Act; business tax and the trade promotion service fee are also calculated from it.
- Transaction Value
- The price actually paid or payable for imported goods sold for export to Taiwan (Customs Act, Article 29, Paragraph 2).
- Royalties and Licence Fees
- Payments made to obtain patent, trademark, copyright, or other intellectual property rights protected by law, that are related to the imported goods; excludes fees for the right to reproduce the imported goods domestically (Enforcement Rules, Article 12).
- Buying Commission
- Fees the buyer pays to its own overseas purchasing agent; excluded from customs value. A commission paid to the seller, however, must be added.
- Special Relationship
- One of the 8 types of buyer-seller relationship listed in Article 30, Paragraph 2 of the Customs Act; the transaction value is set aside only if the relationship “affects the transaction value.”
- Transfer Pricing
- The price or profit a business sets for its controlled transactions, reviewed by the National Taxation Bureau under Article 43-1 of the Income Tax Act; a separate system from customs valuation.
- Advance Ruling on Valuation
- Under Article 36-1 of the Customs Act, an application filed with the Customs Administration before importation to confirm whether any cost must be added to the customs value; the result is valid for 3 years.
- Application for Review
- The first step of administrative remedy: if you disagree with the customs value or duty assessed by Customs, you file this with Customs within 30 days of the day after receiving the duty payment notice.
- WTO Customs Valuation Agreement
- The Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which makes the transaction value the primary valuation method; Articles 29 through 35 of Taiwan's Customs Act follow the same framework.
Sources and Limits of Verification
The statutes, deadlines, rates and rulings on this page are based on the original pages actually opened on September 25, 2026; each source below includes a link, verification date and key original wording. News items and rules on advance valuation rulings added on October 23, 2026 are based on the original pages opened that day.
Statutes, Government Documents and Rulings
- Customs Act, Articles 29–36, Article 36-1, Articles 45–47 (amended 111-05-11; verified 2026-09-25): “For goods subject to ad valorem duty, the customs value of the imported goods is calculated on the basis of the transaction value of the imported goods.” “Customs may, at the taxpayer's request, change the order in which this Article and Article 34 are applied for assessment.”
- Customs Act Enforcement Rules, Articles 11–19 (amended 113-12-23; verified 2026-09-25): “The 'royalties and licence fees' referred to in Article 29, Paragraph 3, Item 3 of the Act means payments made to obtain patent rights, trademark rights, copyrights and other intellectual property rights protected by legislation, that are related to the imported goods. This does not include fees paid to obtain the right to reproduce the imported goods domestically.”
- Regulations Governing Advance Rulings on the Valuation of Imported Goods (amended 115-01-23; verified 2026-09-25): the reply period is “within 45 days,” extendable to “within 90 days” if necessary; the ruling is “valid for 3 years from the date the notice is issued to the applicant.”
- Operating Directions for Advance Rulings on the Valuation of Imported Goods (Customs Administration, Ministry of Finance, amended 107-04-19; verified 2026-09-25): royalty cases must be accompanied by documents such as the “Patent and Franchise Licence Agreement” and the “Sale and Purchase Contract.”
- Ministry of Finance Order Tai-Cai-Guan-Zi No. 09700325030 of August 11, ROC year 97 (2008) (verified 2026-09-25): where any cost under each item of Article 29, Paragraph 3 was not included, “Customs shall adjust the customs value to include it and levy the duty; unless forged, altered, or false invoices or supporting documents were submitted, no penalty shall be imposed under Article 37, Paragraph 1 of the Customs Anti-smuggling Act.”
- Ministry of Finance press release: Customs urges importers to voluntarily declare royalties and licence fees related to imported goods (2023-01-04; verified 2026-09-25): “If Customs finds an under-declaration or omission during review, in addition to having to pay the back duty, clearance may be delayed, affecting the importer's own interests.”
- Customs Administration, Ministry of Finance FAQ: Besides the price of the goods, what items are excluded from and included in the price actually paid or payable? (verified 2026-09-25): example — “the customs value shall be calculated using the actual price paid, i.e., the contract price of US$10 per unit plus the R&D fee of US$1 per unit.”
- Customs Administration, Ministry of Finance FAQ: Should freight surcharges be included in the customs value of imported goods? (verified 2026-09-25): “Regardless of whether it is borne by the importer or the overseas seller, it must be included in the customs value declared to Customs.”
- Directions for Customs to Assess Customs Value Following a One-Time Annual Transfer Pricing Adjustment (amended 111-04-22; verified 2026-09-25): a business must apply for a customs value assessment “within one month after the accounting year ends,” and “late applications will not be accepted.”
- Ministry of Finance Order Tai-Cai-Shui-Zi No. 10804629000 of November 15, ROC year 108 (2019) (verified 2026-09-25): after a one-time transfer pricing adjustment, the income tax final return “must still be handled in accordance with Article 43-1 of the Income Tax Act, the Regulations Governing Assessment of Non-Arm's-Length Transfer Pricing of Profit-Seeking Enterprises, and related laws and regulations.”
- Regulations Governing Assessment of Non-Arm's-Length Transfer Pricing of Profit-Seeking Enterprises, Articles 3–4 (amended 109-12-28; verified 2026-09-25): “Transfer pricing means the price or profit set by a profit-seeking enterprise for its controlled transactions.” The threshold for an affiliated relationship is “20% or more.”
- Value-Added and Non-Value-Added Business Tax Act, Article 20 (amended 114-05-28; verified 2026-09-25): “For imported goods, the business tax is calculated at the rate specified in Article 10 on the amount of the customs value plus the import duty.”
- Trade Act, Article 21 and Article 21-1 (amended 108-12-25; verified 2026-09-25): the trade promotion service fee “shall not exceed 4.25 per 10,000 of the value of the goods exported or imported”; for imported goods, “the customs value shall govern.”
- Customs Administration, Ministry of Finance FAQ: What taxes and fees are payable on imported goods? (verified 2026-09-25): “Trade promotion service fee: the customs value of the goods multiplied by 0.04%. (Note: the fee is waived if NT$100 or less.)”
- WTO Agreement on Implementation of Article VII of GATT 1994 (the Customs Valuation Agreement), Articles 1, 4, 8 and 15 (verified 2026-09-25): Article 8.1(c) "royalties and licence fees related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of sale of the goods being valued"
- WTO Customs Valuation Agreement, Annex I Interpretative Notes (Note to Article 8) (verified 2026-09-25): "the charges for the right to reproduce the imported goods in the country of importation shall not be added to the price actually paid or payable"
- WCO Guide to Customs Valuation and Transfer Pricing (2018 edition) (World Customs Organization; verified 2026-09-25): "not intended that there should be an examination of the circumstances surrounding the sale in all cases where the buyer and the seller are related"
- Supreme Administrative Court Judgment 99-Pan-958 (2010-09-23; verified 2026-09-25): “The royalty required to be included in the customs value under Article 29 of the Customs Act is not limited to payments made to the seller.”
- Supreme Administrative Court Judgment 101-Pan-532 (2012-06-14; verified 2026-09-25): “The levy of business income tax and of customs duty each has its own statutory requirements.”
- Ministry of Finance press release: Make Good Use of Advance Valuation Rulings to Declare the Customs Value of Imported Goods Correctly (issued by the Customs Administration, 2026-10-06; same text on the Keelung Customs site; verified 2026-10-23): “In practice, taxpayers unfamiliar with the rules often fail to declare costs that must be added (such as freight surcharges), resulting in additional duty being assessed afterwards.”
- Regulations Governing Advance Rulings on the Valuation of Imported Goods, Articles 2–10 (amended 115-01-23; verified 2026-10-23): applications not accepted under Article 6 include “hypothetical transactions, or transactions not to be carried out within one year”; under Article 8 the review result is notified “within twenty days from the day after receipt of the review application”.
- Operating Directions for Advance Rulings on the Valuation of Imported Goods, points 2, 3 and 7 (Customs Administration, Ministry of Finance, amended 107-04-19; verified 2026-10-23): applications are filed “with Keelung Customs, Customs Administration, Ministry of Finance”; “where the applicant imports the same goods during the advance ruling period, Customs may release the goods first under Article 18(2) of the Customs Act.”
- Customs Act Article 18(2) (verified 2026-10-23): at the taxpayer’s request, Customs may “allow it to submit the documents required for review and pay a deposit of a corresponding amount, release the goods first, and review afterwards”.
- Taipei National Taxation Bureau press release: Three Requirements for One-Time Transfer Pricing Adjustments (2026-10-22; verified 2026-10-23): “and within one month after the end of the fiscal year, submit an application and related documents to Customs to assess the customs value”.
- WTO Agreement on Trade Facilitation, Article 3.9 (verified 2026-10-23): Members are encouraged to provide advance rulings on “the appropriate method or criteria, and the application thereof, to be used for determining the customs value under a particular set of facts”
- WCO Technical Guidelines on Advance Rulings for Classification, Origin and Valuation (June 2018) (World Customs Organization; verified 2026-10-23): “adding certainty and predictability to international trade and helping traders to make informed business decisions based on legally binding rulings”
Academic and Research Literature
On the Determination and Assessment of the Customs Value of Imported Goods: Taiwan's Current Valuation System and the WTO Customs Valuation Agreement (original in Chinese)
Explains that Taiwan's customs valuation system follows the WTO Customs Valuation Agreement, and traces how valuation disputes proceed from application for review to administrative appeal and then litigation.
A Study of Transfer Pricing by Multinational Enterprises and Customs Valuation (original in Chinese)
Discusses the gap between after-the-fact transfer pricing adjustments and customs valuation, and recommends that importers apply to Customs for an advance ruling on valuation and negotiate an advance pricing agreement with the National Taxation Bureau.
Customs Valuation and Transfer Pricing — A Comparison of International Practices
Written by a Customs Administration officer; explains that the WCO and most national customs authorities remain cautious about relying on transfer pricing documentation.
The Customs Treatment of Royalties and License Fees with Regard to Imported Goods
Shows that a royalty is not automatically dutiable or exempt — it depends on whether it relates to the goods being valued and whether it is a condition of sale.
Intangible Assets and Customs Valuation
Shows that a relationship between buyer and seller alone is not enough to reject the transaction value — it must be tested using the circumstances of the sale or test values.
Interplay Between Customs Valuation and Transfer Pricing in the European Union
Notes that, internationally, there is still no concrete legal solution for reconciling transfer pricing with customs valuation.
Developments at the WCO Technical Committee on Customs Valuation 2021−2022 regarding royalties
Notes that the WCO Technical Committee on Customs Valuation continues to issue advisory opinions on the addition of royalties.
① No regulation named “Operating Directions for Reviewing the Customs Value of Imported Goods” or “Regulations for Collecting the Trade Promotion Service Fee” could be found in the Laws & Regulations Database or the Ministry of Finance's regulatory system — this page relies on the provisions that actually exist; ② The 0.04% trade promotion service fee rate is set by the competent authority; the waiver for NT$100 or less is based on the Customs Administration FAQ and a Ministry of Economic Affairs announcement, but the original announcement page could not be opened this time; ③ The rule that distribution-right fees are not added comes from a note in the WTO Agreement, with no word-for-word equivalent in Taiwan's statutes; ④ The original text of individual WCO Technical Committee on Customs Valuation advisory opinions requires a login, so this page does not quote its content; ⑤ The worked example uses hypothetical amounts and a hypothetical tax rate; ⑥ Academic literature is used for background only; ⑦ This page does not constitute legal or tax advice — consult Customs or a professional for your specific case.
Frequently Asked Questions
Is Customs Value Based on the Price I Paid?
Can the 6 Customs Valuation Methods Be Used Out of Order?
If a Royalty Is Paid to the Brand Owner Instead of the Seller, Must It Still Be Added?
Which Royalties Do Not Need to Be Added to Customs Value?
Will Customs Always Reject the Transaction Price Between Related Companies?
If the Customs Value Is Assessed Too High, How Long Do I Have to Apply for Review?
How Is the Trade Promotion Service Fee Calculated?
Is There a Regulation Called “Operating Directions for Reviewing the Customs Value of Imported Goods”?
Which customs office handles advance valuation rulings, and how long does it take?
Can I request an advance valuation ruling on prices between related companies?
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Ship From the Shenzhen Warehouse to Taiwan — Get the Declared Value Right the First Time
HowBridge provides consolidation and customs clearance from mainland China to Taiwan; a company declarant whose tax ID is registered as an import/export operator may clear customs formally under the company's name. When declaring, be sure to add the freight, insurance and any royalty that must be included in the goods value.
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