The Executive Yuan has approved a draft revision of the Customs Law that will allow bonded factories to import machinery and equipment duty-free for their own use, benefiting 295 factories throughout Taiwan. The amendment will also allow freight forwarders-initially, 83 authorized economic operators (AEOs)-to engage in multi-nation container consolidation.

The Ministry of Finance (MOF) explains that multi-nation container consolidation is one model of logistics whereby operators consolidate containers from different sources and then ship them on. Current law allows only shipping companies and customs brokers to engage in this business, but once freight forwarders are taken into the scope of the Customs Law they will be able to submit a hatch cargo list to Customs and handle transshipment services. For example, they will be able to bring in cargo from Singapore, Hong Kong, or mainland China, carry out unloading and value-added logistics services in Taiwan, then re-consolidate the cargo and ship it to Europe, America, or elsewhere. This will create new business opportunities for freight forwarders and boost the volume of shipping through Taiwan's harbors.

In the interest of consistency and fairness of tax preferences for bonded factories and other bonded areas, the amendment also stipulates that bonded factories can import machinery and equipment for their own use duty-free. If such machinery and equipment is shipped to a tax zone within five years after it is imported, however, the business involved will be required to pay the applicable tariff.



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