Regulations Governing the Establishment and Management of Duty-free Shops Article 25

The duty-free shop is required to conduct an annual physical inventory of all its bonded goods contained in the duty-free shop and stored in the self-provided bonded warehouse. Said annual physical inventory should be conducted under the presence of a customs officer; however, the duty-free shop may apply for a CPA supervised physical inventory procedure with the Customs. Thereafter, the duty-free shop may proceed with the physical inventory under the supervision of the CPA (certified public accountant) and the customs officer. The CPA should affix his or her signature to the official physical inventory report.The interval period between each annual physical inventory should be between ten (10) to fourteen (14) months (inclusive) from the date of the previous year’s physical inventory. However, under special circumstances, the duty-free shop may apply for an advancement or postponement of such schedule with the competent Customs office. On the other hand, Customs is entitled to demand that the shop conduct a physical inventory at any time it shall find it necessary.In the event of errors discovered after the conclusion of the physical inventory referred in the preceding paragraph, the duty-free shop should apply for a customs re-inspection before the transfer or sale of the goods in question. Thereafter, upon Customs verification, the duty-free shop may amend the inventory report. However, application for re-inspection and amendment filed two weeks after the inventory date shall no longer be entertained.The duty-free shop is required to prepare the computer printout of the annual financial report based on the annual financial statements of the previous year, the annual physical inventory checklist of the current year, the account journal, the import and export declaration forms, the Warehouse Transfer Application Forms and other storage delivery, shipment or goods destruction/disposal reports. These documents should be prepared within two months after the physical inventory date. In addition to one hard copy of physical inventory list and financial report, another two copies of the list and report in electronic format shall also be submitted to the competent Customs office for evaluation. The one hard copy of physical inventory list and financial report may be stored in electronic format upon the approval of the competent Customs Office.The duty-free shop may apply for Customs authorization for the institution of a non-stop or an out-of-hour annual physical inventory. Inventory procedure should be defined in the operating procedure of the annual inventory of the duty-free shop. In the case where an application for an off-office hour physical inventory is filed, Customs shall collect a special processing fee pursuant to the regulations governing Customs processing fees and charges regulations.