Taipei customs points out that, in accordance with Article 29 of the "Customs Act", if the royalties fee is related to the goods paid by the buyer as a condition of the sale of the goods, the taxpayer should include royalties fee in customs taxable value.  The recent case indicates that, while the Customs performing post-clearance audit system, a Japanese retailer did not declare the royalties fee in customs taxable value, and it resulted in the taxpayer shall pay the amount of duty to be recovered over NTD 20 million.

Taipei Customs further announces that whether the royalties fee should be included in customs taxable value or not is on case by case basis. In practice, there are also cases the royalties fee is paid to an unrelated third party, and no written contract has been signed. In summary, if the royalties fee is related to the goods paid by the buyer as a condition of the sale of the goods, the taxpayer should include royalties in the customs taxable value.

Taipei Customs calls on importer/exporter to honestly declare customs taxable value. If customs taxable value has any omission, the taxpayer should take the initiative to apply for modification, so as not to be punished by the Customs. In accordance with Article 36 of the "Customs Act", prior to importation, the tax-payer may request in written form that Customs supply an explanation of the method used to determine the customs value of the imported goods.  Upon acceptance of a taxpayer's request, Customs Administration, Ministry of Finance shall reply to the duty-payer in written form in 45 days.