The National Taxation Bureau of the Northern Area, Ministry of Finance (NTBNA) indicated that, given the number of foreign travelers to Taiwan is growing year by year, in order to alleviate travelers crowding the counter of the customs to claim VAT refund before departure and cope with the tourism development policy of the government, the Ministry of Finance and the Ministry of Transportation had studied and passed resolutions referring to international trends by assigning the VAT refund services for foreign travelers to a private authorized agent and using electronic operations to strengthen service quality. The Regulations Governing VAT Refund Claims by Foreign Travelers Purchasing Goods Eligible for VAT Refund (hereinafter referred to as “the Regulations”) is amended accordingly, and such amendment was announced on January 26th. The Guidelines for Private Operators and Authorized Stores Processing Value-Added Tax Refunds on Eligible Goods Purchased by Foreign Travelers (hereinafter referred to as “the Guidelines”) is also amended accordingly, and such amendment was announced on January 29th. The Regulations and the Guidelines coordinating the E-outsourcing service for foreign travelers claiming a VAT refund on the purchase of eligible goods, became effective on May 1st, 2016.
NTBNA further explained that the amendments on the interests that foreign travelers shopping VAT refund include the following:
(1). Amendment of the definition of foreign travelers, limited only to foreign travelers who stay for less than 183 days from the arrival date may claim VAT refunds, to implement the policy purposes.
(2). Provisions of the VAT refund services for foreign travelers could be assigned to a private authorized agent, and the agent may charge a fee for the services provided, based on the user pays principle.
(3). Amend ways for foreign travelers to apply for VAT refunds, including the Tax Refund Service at Airports/Ports, On-site Small-amount Tax Refund, and Authorized Downtown Refunds Service.
(4). Reduce the minimum VAT refund-qualified purchase amount from NT$3,000 to $ 2,000 and extend the prescribed period the travelers shall carry the refunded goods outbound from 30 days to 90 days.
(5). Amendment concerning foreign travelers who would like to apply for the “On-site Small-amount Tax Refund.” Aside from complying with the condition of purchasing the eligible goods from the same authorized store on the same day with an aggregate amount over NT$2,000 (VAT inclusive) but not more than NT$24,000 (VAT inclusive), the traveler is also required to claim VAT refund for the aggregate purchase amount not more than $120,000 (VAT inclusive) during one single visit, and not more than NT$240,000 (VAT inclusive) during the entire year in Taiwan. If more than NT$240,000 (VAT inclusive) is purchased, the traveler must claim VAT refunds at the Tax Refund Service Counters located at airports/ports.
As foreign travelers may choose different ways of claiming VAT refunds for their own needs after May 1st, 2016, NTBNA suggests foreign travelers understand the requirements, limits of purchase amount, and the prescribed period of carrying refunded goods outbound mentioned above to protect their own rights.
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