Taipei Customs(台北關)

Bonded Factory Cargo Clearance

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1. What is a Bonded Factory?

According to Article 59 of the Customs Law, manufacturers of export products may apply for boned factory registration to the Customs authorities to enjoy import tariff exemption for import raw materials. Such raw materials shall be stored in the bonded factory for manufacturing or processing.(Upon the export of products, the tariff shall be refunded). The Customs shall not release such products from the factory until the supplementary assessment of import duties and taxes has been made by the supervising Customs in accordance with the form and state of such products at the time of their release from the factory.

2. Application and Establishment of a Bonded Factory

2.1 Responsible Unit: Business Section, Bonding Division

2.2 Requirements:

2.2.1 A company which is organized, registered and incorporated as a company limited by shares in accordance with the Company Law and has a properly registered factory may apply for bonded factory registration.

2.2.2 A company with a paid-in capital of more than NT$50 million may apply; The branch office of a foreign company which is established within the territory of the Republic of China under other laws, whose operating capital actually remitted in and registered is in an amount of more than NT$50 million and which has a duly registered and qualified factory may apply to the Customs for approval of registration as a bonded Factory. For a bonded factory whose registration had been approved before December 30, 2001 and whose paid-in capital or operating capital did no reach the amount, it shall increase its capital within five years by December 30, 2006. If it fails to do so in the stipulated period, the Customs may abrogate its bonded-factory registration.

2.2.3  The company shall be in a sound financial condition; i.e., it has accumulated no losses; or, it has suffered no losses three years on average before application (if the company exists for less than three years, the time is calculated on the basis of the actual length of its existence); or, if there are accumulated losses, the net capital is still maintained above NT$50 million; or after deducing the accumulated losses the capital is less than NT$50 million but the company has increased the capital or has provided other collateral.

2.2.4  The company shall not be in arrears with any tax nor has had, during the recent three years, a record of tax evasions in an aggregated amount of more than NT$500,000.

2.2.5 The factory compound renders easy control by Customs, and has guard houses manned with security personnel.

2.2.6 The products of the factory shall be entirely for export. However, this shall not apply to the case while domestic sale of a portion of its products (no more than half of total output on a yearly basis) is specifically authorized by the supervising Customs.The machinery and equipment necessary for manufacture of finished products for export sales and the adequate and complete safety facilities installed in the factory shall have been inspected and verified by Customs as being in conformity with established standards.

2.2.7 It shall have separate warehouses approved by the Customs authorities through inspection as appropriate for storage of raw materials and finished products. However, for bulky and hazardous bondable goods, there shall be separate and proper storage places approved by Customs.

2.2.8 The plant buildings and facilities of a bonded factory shall be in conformity with the following standards:

2.2.8.1 The installation of the production machinery and equipment has already been completed and production shall begin immediately or has already started.

2.2.8.2 The warehouses for raw materials and the warehouses for finished products must have strong structures with the necessary facilities to secure the safety of goods stored therein, such as facilities for the prevention of burglary, fire and flood; for proper ventilation and lightly, and are properly isolated from the office area.

2.2.8.3 Proper isolation facilities shall be erected to separate the factory area from outside surroundings.

2.2.9 The factory shall have the ability to process its bonded-goods operations with computer.

3. Cargo Clearance Procedures for Bonded Factories

3.1 Cargoes shipped to bonded factories

3.1.1 Imported from abroad

In importing raw materials, a bonded factory shall prepare an application(B6)for importation of raw materials and apply for Customs clearance in accordance with the procedures applicable to ordinary goods. Customs may, as it deems necessary, send Customs official(s) to examine and inspect the imported raw materials at the premises of the bonded factory.

3.1.2 Imported from bonded areas

3.1.2.1 For bonded cargoes sold to bonded factories by enterprises in export processing zones or in science-based industrial parks or other bonded factories, the seller and the buyer shall jointly prepare a declaration enclosing the necessary documents (B2, invoice, packing list) to declare the cargoes at the Customs. They may apply to the Customs for permission to make reports month by month.

3.1.2.2  For cargoes supplied to bonded factories by bonded warehouse, the owner of the cargoes or the holder of the cargo manifest shall prepare the necessary documents(D7) to declare the cargoes at the Customs, and the operator of the warehouse may, together with the supervising Customs officers, deliver the cargoes from the warehouse after having confirmed the markings and the quantity according to the clearance paper or the permit of delivery.

3.1.2.3 For cargoes sold to bonded factories by the self-provided bonded warehouses, the seller and the buyer shall jointly prepare a declaration (D7) enclosing the necessary documents to declare the cargoes at the Customs. They may deliver the cargoes from the warehouse after having confirmed the markings and the quantity according to the clearance paper or the permit of delivery. They may apply to the Customs for permission to make reports month by month.

3.1.2.4 For cargoes supplied to bonded factories by the logistics centers, the factory and center shall jointly prepare a declaration(D7) enclosing the necessary documents  and the center shall declare the cargoes at the Customs electronically. Upon clearance, the cargoes may be delivered. They may apply to the Customs for permission to make reports month by month.

3.1.3 Imported from dutiable areas

While offsetting or refund of import duties and taxes is required in respect of the raw materials for processing sold to a bonded factory by a domestic supplier, upon entry of raw materials into the bonded factory, the buyer and the seller shall jointly prepare and co-sign an application (B1)for export/import of raw materials and submit the same together with invoices, packing lists, etc., to the supervising Customs for approval. The raw materials shall then be permitted to enter the factory and entered in the account books. The supervising Customs shall, within twenty days from the date following the approval of the application, approve and issue the duplicate application for goods regarded as exports to the domestic supplier as evidence for application for refund and/or offsetting of duties and taxes. They may apply to the Customs for permission to make reports month by month.

3.2 Cargoes shipped from bonded factories

3.2.1 Bound for courtiers abroad

In exporting its products, a bonded factory shall prepare an application (B9)for export of products and indicate therein the page number(s) and reference number(s) of the relevant "Schedule(s) of Raw Materials Used Per Unit of Product" as approved by the supervising Customs, (the Customs office at the port of export may, as it deems it necessary, require the bonded factory to provide a photocopy of such approved Schedule(s) of Raw Materials Used Per Unit of Product") or the reference number(s) of the relevant application(s) filed with or received by the supervising Customs, if such Schedule(s) is (are) pending approval, and file the same with the Customs office at the port of exportation for Customs clearance in accordance with the procedures applicable to export of ordinary goods.

3.2.2 When selling bonded goods to an enterprise in the science-based industrial park or an exporting enterprise in an export processing zone or another bonded factory for further processing and export, the bonded factory which sells such goods and the buyer thereof shall jointly prepare an application(B2) for export/import of such bonded items, and shall file the same together with relevant documents, including invoices, packing lists and approval(s) given by the competent authority in the bonded area, with the supervising Customs or the local Customs branch office at seller’s end for Customs clearance.

3.2.3 Bound for dutiable areas

3.2.3.1 For products to be sold for further processing and export to an export processing factory eligible for recording of payable import duties and taxes on credit:

The buyer and the seller shall jointly prepare an application(G2) for export/import of products processed and sold for further processing and export by a bonded factory to an export processing factory eligible for recording of payable import duties and tax and file the same together with invoices, packing lists and other relevant documents with the supervising Customs for recording of import duties and taxes on credit and Customs release formalities before delivering the products from the bonded factory. The bonded factory is allowed to submit a monthly report. Recording of import duties and taxes on credit against the said export processing factory shall be made in accordance with the "Regulations Governing Offsetting or Refund of Import Duties and Taxes on Raw Materials used in Export Products", with the date of Customs release to be regarded as the date of export and import.

3.2.3.2 For products sold to domestic companies:

The products of a bonded factory shall be for export in principle. If domestic sale of such products is required, an application for approval shall be filed with the supervising Customs. For processed products of a bonded factory which are approved for domestic sales, the bonded factory alone or jointly with the buyer party, shall prepare an application (G2) for "import of foreign goods"; and shall not release such products from the factory until the said application has been filed with and supplementary assessment of import duties and taxes has been made by the supervising Customs in accordance with the form and state of such products at the time of their release from the factory.

The firms purchasing such domestically salable products may apply to the supervising Customs for selecting one of the following methods to assess import duties on such products, and once the selection is made, it shall not be changed until the expiry of one year thereafter provided, however that where domestically salable products are manufactured from materials more than 50% of which are shingle intermediate goods for assembly use, import duties on such products shall be assessed according to the tax rate applicable to the Duty-Paying Value of such products.

A. Customs duties leviable on the domestically salable products shall be calculated and assessed in accordance with the relevant tariff rate against the amount equal to (70) percent of the Duty-Paying Value of such products.

B. While the fact of use of local produced non-bondable raw materials in the domestically salable products have been confirmed, the import duties leviable thereon shall be calculated and assessed in accordance with the applicable tariff rates against the Duty-Paying Value of such products less the value of such non-bondable raw materials.

C. While the domestically salable products are reprocessed for export, such products are eligible for offsetting or refund of duties and taxes in accordance with the Regulations Governing Offsetting or Refund of Import Duties and Taxes on Raw Materials used in Export Products. However, this shall not apply to the products or commodities which have been excluded from the list of duty refundable items.

For the raw materials imported by a bonded factory are diverted to domestic sales with the approval of the supervising Customs, the provision in Paragraphs 1 and C shall apply mutatis mutandis.

4. For further questions, please refer to relevant rules and regulations at Bonding/Duty Drawbacks

 

TEL:(03) 3834265 Ext 360 for application of bonded factory,

(03) 3834265 Ext 321, 322for bonded cargo clearance, and

(03) 3834265 Ext 308, 306 for bonded cargo management.

Office hours:Monday ~ Friday  8:30-12:30  13:00-17:00

Contact point:Clearance Division II

 

 

  • Date:2017-07-21
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