How to Read an Import Declaration? Complete Guide to Claiming Input VAT from Customs Tax Certificates
When a company imports goods, the business tax collected by Customs can be credited as input business tax (VAT) using the "deduction copy of the Customs-collected Business Tax Payment Certificate". However, the "goods description" and "CCC tariff code" on the import declaration must match your line of business; otherwise the National Taxation Bureau will treat the goods as "not used for your own business" and disallow the input tax, denying the credit (Business Tax Act Article 19), and may even impose a penalty of 5 times the evaded tax for falsely declaring the goods description (Customs Anti-Smuggling Act Article 37). That is why reporting the correct tariff code at the time of customs clearance is the key to whether your company can legally claim the credit.
📅 Last updated 2026-10-23 · ✍️ HowBridge Consolidation Editorial Team · 🛡️ Compiled from Customs announcements and current regulations
Why the tariff code determines whether your company can claim input tax
When the National Taxation Bureau audits input tax, it uses the "goods description" and "CCC tariff code" on the import declaration to determine whether the imported goods are genuinely required for the company's own line of business. If they don't match, the input tax can't be claimed.
⚠️ Case study: a company selling clothing declares its import declaration goods description as "stationery" (tariff 9608) → the National Taxation Bureau deems it unrelated to the company's line of business, not used for its own business, and disallows all input tax, denying the credit (Business Tax Act Article 19, Paragraph 1, Subparagraph 2); if the goods description was falsely declared to obtain a lower tax rate, it also constitutes false declaration under Customs Anti-Smuggling Act Article 37.
✓ HowBridge's partner AEO-certified customs broker, with ten years of experience, understands every tariff code and helps businesses "declare with the right recommendation, declare correctly". It can also issue formal invoices and apply for the customs tax certificate and import declaration, ensuring the documents can legally serve as input tax—competitors only ship your goods; HowBridge understands the accounting.
How to read an import declaration (N1 / N5 field breakdown)
The most common Taiwan import declaration is the N5 (consolidated document) declaration, with a 14-digit declaration number. It is divided into four main sections:
① Header section
| Declaration number | 14-digit identifier (receiving customs office 2 + exporting customs office 2 + year 2 + container number 4 + serial number 4), assigned by the customs system |
| Declaration type | N1 general import / N5 consolidated document (integrated invoice and packing list) |
| Clearance mode | C1 automatic release without review or inspection / C2 document review / C3 physical inspection |
| Acceptance date / import date | Date Customs accepted the declaration; date the goods arrived in Taiwan |
② Taxpayer section
| Taxpayer name | Name of the importing company (must be recorded on the accounting document) |
| Unified business number | The company's 8-digit UBN, the key identifier for claiming input tax |
| Address / customs broker code | Registered address; code of the appointed customs broker |
③ Goods information section (one set per item)
| Goods description | Chinese and English product name; must match the actual goods and your line of business |
| Tariff code CCC | 11-digit classification code; determines the customs duty rate and import regulations |
| Duty-paying value CIF | Landed value = goods price + freight + insurance; the basis for calculating most taxes and fees |
| Country of origin / seller / quantity and weight | Country of production (affects preferential duties), foreign seller, quantity, net and gross weight |
④ Tax and fee calculation section
| Tax / fee | Calculation formula |
|---|---|
| Customs duty | Duty-paying value (DPV) × customs duty rate (per CCC code) |
| Trade promotion service fee | Duty-paying value (DPV) × 0.04% (exempt if under NT$100) |
| Commodity tax (if applicable) | (Duty-paying value + customs duty) × commodity tax rate |
| Business tax (VAT) | (Duty-paying value + customs duty + commodity tax + tobacco and alcohol tax) × 5% |
＊Legal basis for the formulas: Value-added and Non-value-added Business Tax Act Article 20; Customs Administration's explanation of taxes and fees payable on imported goods.
The 11-digit structure of a CCC tariff code
Lookup systems: the Customs Administration's AI tariff lookup hscode.customs.gov.tw, the Customs-Port-Trade Single Window GC411, and the Trade Administration's goods classification system. HowBridge has a built-in AI lookup of 12,000+ CCC tariff codes—just enter a product name to search for free. ⚠️ AI lookups are for reference only; the final classification is determined by the customs office handling your case.
What is a Customs-collected Business Tax Payment Certificate
When goods are imported, Customs collects business tax on behalf of the tax authority under Business Tax Act Article 41, and after payment issues the "Customs-collected Business Tax Payment Certificate" (commonly called the import declaration deduction copy). It serves two accounting functions:
① Input tax document
Use the deduction copy to claim input tax and offset it against the output tax for the period.
② Proof of purchase cost
Together with the import declaration, it serves as the source document for recording purchase costs.
Myth-busting: you can claim input business tax (VAT) with a simplified declaration too
Many people assume that “an express simplified declaration doesn’t come with a formal document, so a company can’t claim the tax credit”—this is a misconception. For imported express consignments with a customs value of NT$50,000 or less, a company or business can appoint a customs broker to file using a “simplified declaration form” (declaration types X2 / X3); Customs collects business tax as required by law and issues the “Customs-Collected Business Tax Payment Certificate”, which can be used to claim the input tax credit when the input requirements are met. Once the 6 duty-free times per half-year in the X2 duty-free bracket have been used up, the low-value exemption no longer applies from the 7th time onward; where business tax is actually paid, you must still confirm that the deduction copy shows the company’s unified business number and correct details. For the X1 / X2 / X3 and C1 / C3 mechanisms of simplified declarations, see the guide to simplified declarations and customs declarations.
| Declaration type | Duty-paying value (per shipment) | Tax situation | Can input business tax (VAT) be claimed |
|---|---|---|---|
| X1 imported express document | Document | — | Documents are not goods; no tax |
| X2 low-value duty-free | NT$2,000 or less | Duty-free for the first 6 times per half-year; taxed from the 7th time onward | No input tax while duty-free; once taxed, ✅ can be claimed with the payment certificate |
| X3 low-value taxable | NT$2,001–50,000 | Business tax charged | ✅ Can be claimed (with the Customs-collected Business Tax Payment Certificate) |
| General import declaration | Over NT$50,000 (high value) | Business tax charged | ✅ Can be claimed |
✓ The 3 key conditions remain unchanged: ① the document must record the company's unified business number (UBN) (Business Tax Act Article 33); ② the goods must be used for your own business and ancillary operations (Article 19—if not for your own business, the credit is still disallowed); ③ the goods description / tariff code must still be declared truthfully (a simplified declaration is likewise subject to Customs Anti-Smuggling Act Article 37). A simplified declaration merely "simplifies the filing method"; the substantive requirements for claiming input tax are the same as for a formal declaration.
＊Legal basis: Air Express Consignments Clearance Regulations Article 11 (import express classification: X1 documents / X2 duty-free ≤2,000 / X3 taxable 2,001–50,000 / high value >50,000), Article 17 (appointment via simplified declaration form), and the operational rules for clearance of air express consignments by simplified declaration (X1 / X2 / X3 declaration types); 6 duty-free times per half-year (Customs Administration, with the entire shipment taxed from the 7th time onward); Value-added and Non-value-added Business Tax Act Articles 33 and 41 (Customs-collected business tax; input tax documents). High-value express goods with a duty-paying value over NT$50,000 must instead be handled under a general import declaration.
A company claiming input business tax (VAT): the 4 requirements (all indispensable)
Requirement 1｜Hold a valid document
You must hold the "deduction copy of the Customs-collected Business Tax Payment Certificate", recording the taxpayer's name, address, and unified business number (UBN) (Business Tax Act Article 33).
Requirement 2｜File according to the bank payment date period
File based on the period to which the actual bank payment date (tax payment date) belongs, neither earlier nor later; any amount underreported in the period may be made up within 10 years.
Requirement 3｜The goods must be used for your own business and ancillary operations
The most common pitfall: goods not used for your own business cannot be claimed (Business Tax Act Article 19, Paragraph 1, Subparagraph 2) → the imported goods must relate to your line of business, which is why the tariff code / goods description must be reported correctly.
Requirement 4｜Keep documents complete
Bind and keep the deduction copies by period, classified under "purchase expenses" or "fixed assets", ready for audit.
Returns or supplier allowances after import: how is input tax already claimed reduced?
In one sentence: input tax already claimed must be reduced in the period in which a purchase return or allowance occurs; if Customs refunds business tax overpaid on imported goods, the company itself fills in the "Customs refund of overpaid business tax declaration form" and reports it in the period in which the refund is received. The basis is Business Tax Act Article 15, Paragraph 2 (business tax recovered because of a purchase return or allowance shall be deducted from the input tax of the period in which the return or allowance occurs) and Enforcement Rules of the Business Tax Act, Article 38, Paragraph 1, Subparagraph 4 (the tax refund and offset documents to be attached include the "sales return, purchase return or allowance certificate and the Customs refund of overpaid business tax declaration form").
| Situation | When to reduce | Document to use | Legal basis |
|---|---|---|---|
| Goods bought from a domestic supplier, input tax already claimed, then returned or an allowance received | The period in which the purchase return or allowance occurs | "Sales return, purchase return or allowance certificate" | Business Tax Act Art. 15 para. 2; Enforcement Rules Art. 38 para. 1 subpara. 4 |
| Imported goods already claimed with the deduction copy, then Customs refunds overpaid business tax | The period (month) in which the Customs refund is received | Fill in the "Customs refund of overpaid business tax declaration form" yourself and report it in the "returns, allowances and Customs refunds of overpaid tax" column of the Form 401 return | Enforcement Rules Art. 38 para. 1 subpara. 4; Ministry of Finance instructions for Form 401 |
| A purchase return or allowance occurs after the business has registered a suspension | Still reduced in the period in which it occurs (or by filing a correction) | Obtain or issue the certificate | Business Tax Act Art. 15 para. 2; Kaohsiung National Taxation Bureau press release of 2026-08-20 |
Two reminders from the tax bureaus in August–September 2026: ① The Kaohsiung National Taxation Bureau (2026-08-20) gave the example of Company A, which bought goods for NT$400,000 with input tax of NT$20,000 in March 2026 and claimed it in the March–April period; it registered a suspension in May and returned part of the goods in June (purchase return of NT$200,000, input tax NT$10,000), and must still reduce input tax by NT$10,000 in the May–June period. ② The Southern Taxation Bureau (2026-09-10) gave the example of Company A, which claimed input tax of NT$300,000 on NT$6,000,000 of purchases in January 2026, returned goods in May and issued a certificate for a NT$2,500,000 purchase return with tax of NT$125,000, but did not reduce it in the May–June period; besides the additional tax it was penalised. Both releases note that voluntarily filing and paying the tax plus interest before any report or investigation can avoid penalties under Article 48-1 of the Tax Collection Act.
Returning, exchanging or getting an allowance on goods from China: first check whether the goods have been released
- Before release, an application to return the goods abroad approved by Customs: customs duty is exempt under Customs Act Article 50, Subparagraph 4; where, before the goods are taken delivery of, the taxpayer applies to return them abroad or store them in a bonded warehouse with Customs approval, the duty paid is refunded under Article 64, Subparagraph 3. Import business tax is collected by Customs, and its collection and remedies apply the Customs Act mutatis mutandis under Business Tax Act Article 41.
- After import, damage or non-conformity with the contract specifications or quality is found and the foreign supplier compensates or exchanges the goods: under Customs Act Article 51 the compensating or replacement goods are exempt from duty, provided the application is filed with supporting documents within 1 month from the day after the original goods were imported (for machinery, within 3 months from the day after installation and test run).
- Duty or tax over-collected by Customs (for example, a customs value declared too high): a refund may be requested under Customs Act Article 65 within 1 year from the day after the tax was paid. If that business tax was already claimed with the deduction copy, reduce it with the "Customs refund of overpaid business tax declaration form" in the period the refund is received, so the same tax is not credited twice.
- The foreign supplier grants a price allowance after import: a foreign seller does not issue a Taiwanese allowance certificate. An accounting firm article (KPMG Tax Monthly, January 2016) states that where an allowance from a foreign supplier makes the business tax collected by Customs exceed the output tax, a refund may be requested from the tax authority under Ministry of Finance Ruling Tai-Cai-Shui No. 09800052190 of 2009-03-18; this page has not obtained the original text of that ruling, so please confirm your case with your local National Taxation Bureau first.
Triangular trade where goods never pass Taiwan Customs: how are business tax and income tax handled?
In one sentence: business tax depends on how you book the transaction; profit-seeking enterprise income tax must be reported. An enterprise whose head office is in Taiwan is taxed on all of its income inside and outside Taiwan under Income Tax Act Article 3, Paragraph 2; omitted or under-reported income is fined up to 2 times the tax evaded under Income Tax Act Article 110, Paragraph 1. For business tax, the Ministry of Finance tax portal Q&A (updated 2025-10-13) distinguishes two booking methods depending on whether the enterprise bears warranty liability for defects in the goods:
| Booking method | Usual criterion | Business tax | Enterprise income tax |
|---|---|---|---|
| Margin booked as commission or fee income | No warranty liability for defects (brokerage) | Report the margin as sales and, with foreign-exchange proof and transaction documents, apply the zero rate under Business Tax Act Article 7, Subparagraph 2 | Commission income included in taxable income |
| Full amounts booked as purchases and sales | Bears warranty liability, or signs separate sales contracts with the foreign customer and supplier with full-amount remittances | The goods are not shipped from Taiwan (Business Tax Act Article 4, Paragraph 1), so the sale is outside the scope of business tax and no sales amount is reported | Sales revenue minus purchase cost, included in worldwide income |
Kaohsiung National Taxation Bureau, 2026-10-21: using its AI tax application system, the bureau found that Company A had omitted NT$40,847,555 of triangular-trade export revenue from its 2024 income tax return; after deducting related costs, under-reported taxable income was assessed at NT$3,682,464, additional tax of NT$736,492 was levied and a fine of NT$441,895 was imposed under Income Tax Act Article 110, Paragraph 1. The release explains that when an enterprise receives an order from a foreign customer, buys the goods in its own name from a third-country supplier, the goods do not go through customs clearance and are shipped directly by the supplier to the foreign customer, and the enterprise bears warranty liability, the transaction should be booked as purchases and sales; regardless of where the goods are shipped from, an enterprise with its head office in Taiwan is taxed on its worldwide income.
How does this relate to importing from China? If your company buys from the same Chinese suppliers and part of the goods is imported into Taiwan while part is shipped directly from China to customers in third countries: the part imported into Taiwan has an import declaration and the deduction copy of the Customs-collected Business Tax Payment Certificate, and input tax can be claimed under the 4 requirements above; the part shipped directly from China to a third country has no Taiwanese declaration and no creditable import business tax — it is triangular trade and should be booked as in the table above and reported for income tax. HowBridge only serves China → Taiwan (Shenzhen warehouse and Taoyuan warehouse) and does not handle goods shipped directly from China to third countries; we suggest keeping the accounts and documents of the two flows separate.
Importing from China as a company: practical reminders on returns, allowances and filing
- Claiming and reducing happen at two different times: the deduction copy is reported in the period (month) to which the payment date (bank receipt date) belongs; a later return, allowance or Customs refund of overpaid business tax is reduced in the period in which it occurs or the refund is received. The two periods may differ, so track them separately when reconciling.
- Before sending goods back to China, check whether they have been released and taken delivery of: returning before release and returning after delivery fall under different Customs Act articles (Articles 50 and 64 versus Article 51) with different deadlines (Article 51: within 1 month from the day after the original goods were imported).
- If the customs value was under-declared at import and any of the circumstances in Business Tax Act Article 51, Paragraph 1 applies, the business tax additionally collected by Customs may not be credited against output tax (Enforcement Rules of the Business Tax Act, Article 30, Paragraph 2, Subparagraph 1). Declaring the true value is simpler than paying tax afterwards.
- Input tax documents not reported in the current period may be carried to the next period; the period for claiming is limited to 10 years (Enforcement Rules of the Business Tax Act, Article 29). If a missed reduction or error is found, voluntarily filing and paying before any report or investigation avoids penalties under Article 48-1 of the Tax Collection Act.
- When the same supplier has both "import into Taiwan" and "ship directly to a third country" orders, keep contracts, payments and shipping documents separate so imported goods and triangular-trade goods are not mixed in the books.
This section summarises laws and public Ministry of Finance press releases. HowBridge does not provide tax attestation, bookkeeping or tax filing services; whether tax can be credited and when it must be reduced is determined by your local National Taxation Bureau and Customs. For your specific case, consult an accountant or the National Taxation Bureau toll-free line 0800-000-321.
Sources for this section (verified 2026-10-23)
Press releases: Kaohsiung National Taxation Bureau 2026-10-21: AI tax system finds omitted triangular-trade revenue; Kaohsiung National Taxation Bureau 2026-08-20: purchase returns or allowances during suspension must still reduce input tax; Southern Taxation Bureau 2026-09-10: purchase returns or allowances must be reduced in the period they occur. Laws (Laws & Regulations Database of the Republic of China): Value-added and Non-value-added Business Tax Act Articles 4, 7, 15, 41; Enforcement Rules of the Business Tax Act Articles 29, 30, 38; Income Tax Act Articles 3, 110; Customs Act Articles 50, 51, 64, 65; Tax Collection Act Article 48-1. Official guidance: Ministry of Finance tax portal: can the letter-of-credit margin in triangular trade be zero-rated? (updated 2025-10-13); Instructions for the business sales and tax return (Form 401), PDF. Research and practice: Hsieh Hui-Chuan (2009), "The study on taxation issues on multi-lateral international trade of Taiwanese enterprises — on value-added tax and business income tax", master's thesis, EMBA Program, National Chengchi University, NCCU Academic Hub; KPMG Tax Monthly, January 2016 (case of applying for a refund of overpaid business tax after an allowance on imported goods).
Where to look up your own import declaration
Through the Customs-Port-Trade Single Window (portal.sw.nat.gov.tw), log in with a business certificate (for companies and businesses) or a personal certificate to view: the clearance process (C1/C2/C3 status), the full declaration content, and tax and fee payment records, and to print the declaration.
Consequences of misreporting the tariff code / goods description (a two-pronged attack)
| Aspect | Consequence | Legal basis |
|---|---|---|
| National Taxation Bureau side | Goods description / tariff code doesn't match your line of business → input tax is entirely disallowed and the credit is denied | Business Tax Act Article 19 |
| Customs side (involving tax evasion) | False declaration of goods description or tariff code resulting in tax evasion → recovery of customs duty + a penalty of up to 5 times the evaded tax, with confiscation of the goods in serious cases | Customs Anti-Smuggling Act Article 37 |
| Improper classification (no intent to evade tax) | Customs reclassifies the tariff code and notifies you to pay the additional tax | Customs Administration handling principles |
✓ Voluntary correction can avoid penalties: if you voluntarily apply for correction and pay the additional tax before Customs or another authority begins an investigation, you may be exempt from penalty under Customs Anti-Smuggling Act Article 45-3. So the easiest approach is to use HowBridge to check and report the tariff code correctly before placing your order.
Frequently Asked Questions
Official Legal Sources
Business Tax Act Article 19, and Articles 15 / 33 / 41 (Value-added and Non-value-added Business Tax Act); Customs Anti-Smuggling Act Article 37; Customs Administration, Ministry of Finance (taxes and fees payable on imported goods, N5 declaration field-completion guide); Customs-Port-Trade Single Window, Customs Administration tariff lookup. The latest regulations of the competent authority shall prevail.
Related Reading
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