New Regulations Regarding VAT Refunds for Foreign Passengers Will Be Launched Since May 1st, 2016

According to the National Taxation Bureau of Taipei,Ministry of Finance (hereinafter referred to as “NTBT”),in light of international trend, the Value-Added BusinessTax (VAT) refund services for foreign passengers will beassigned to a private authorized agent to construct a morefriendly and efficient tax refund environment for foreignpassengers to enjoy better shopping experiences in Taiwan,so as to obtain higher international recognition and enhanceTaiwan's tourism industry. The Regulations Regarding theClaiming of VAT Refunds by Foreign Passengers PurchasingGoods Eligible for VAT Refund (hereinafter referred to as “the Regulations”) is amended accordingly, and suchamendment was announced on January 26th, 2016 and will beimplemented since May 1st, 2016.

NTBT declared that the amendment to the Regulations includesamendment to the definition of foreign passengers, servicecharges the VAT refund agent may collect from the tax refundservices provided, extension of the prescribed period thepassenger shall carry the refunded goods outbound, andreduction of the minimum VAT refund-qualified purchaseamount. New regulations are also be stipulated in theamendment, such as regulations for providing in-storesmall-amount VAT refund services and regulations for foreignpassengers to claim VAT refund at the downtown authorizedtax refund counter set by the VAT refund agent inside theauthorized TRS-label stores.

It is explained by NTBT that, according to the amendedArticle 3, Article 5, Article 10, and Article 11 of theRegulations, a foreign passenger, who enters the Republic ofChina (R.O.C.) with a non-R.O.C. passport and has stayedwithin the R.O.C. territory for less than 183 days from thedate of entry, may claim VAT refunds(after service chargededuction) from a VAT refund agent, if he/she purchases theeligible goods from the same authorized store on the sameday in an aggregate amount over NT$2,000 (VAT inclusive)and carries such goods outbound within 90 days from the dateof purchase.
NTBT further explained that if a foreign passenger wouldlike to apply to the “in-store small-amount VAT refundservice”, aside from complying with the condition ofpurchasing the eligible goods from the same authorized storeon the same day with an aggregate amount over NT$2,000 (VATinclusive) but not more than NT$24,000(VAT inclusive), thepassenger is also required to claim VAT refund for theaggregate purchase amount not more than $120,000(VATinclusive) during one single visit, and not more than NT$240,000(VAT inclusive) during the entire year in Taiwan.
A foreign passenger who makes a purchase over NT$2,000 (VATinclusive) may request for a “special VAT refund servicedowntown,” which refers to claiming VAT refunds at thedowntown authorized tax refund counter set by the VAT refundagent inside the authorized TRS-label stores. No upper limitof purchase amount is set, but the foreign passenger may notget the tax refund unless he/she pays 7% of the totalpurchase amount (VAT inclusive) by an international creditcard, which is issued under authorization of theinternational credit card organization, under his/her nameas a guarantee of carrying the goods outbound within theprescribed period. The foreign passenger shall carry therefunded goods outbound within 20 days after the VAT refundclaim and such goods shall be examined by an automatic VATrefund machine or by the VAT refund service center in theairport or the port before leaving Taiwan, the guaranteepaid by credit card will not be repaid if he/she fails toobey such regulations.

As foreign passengers may choose different ways of claimingVAT refunds to their own needs since May 1st, 2016, NTBTsuggests the foreign passengers understand the requirements,limits of purchase amount, and the prescribed period ofcarrying refunded goods outbound mentioned above to protecttheir own rights.

(Contact：Ms. Shen, Section Head of the Fourth ExaminationBranch; TEL: (02) 2311-3711 Ext.2510)