Regulations Governing the Establishment and Management of Offshore Island Duty-Free Shops Article 27

The bonded goods stored in offshore island duty-free shops and their self-provided bonded warehouse shall be subject to an annual physical inventory and to be conducted by the competent Customs Office with an officer appointed. Such inventory may, upon prior application and approval by the competent Customs Office, be engaged to a Certified Public Accountant (CPA) to carry out the inventory and attest to it. The competent Customs Office may assign personnel to conduct such inventory jointly.The interval period between each annual physical inventory shall, except under special circumstances approved in advance by the competent Customs Office for an advancement or postponement of such schedule, be no less than ten months and no more than fourteen months from the date of the previous year’s physical inventory. The competent Customs Office may, when necessary, require any offshore island duty-free shop to conduct a physical inventory at any time.Offshore island duty-free shops shall, within one week from the day following the annual physical inventory date, submit the inventory list (along with the audit report if the inventory is conducted by a Certified Public Accountant (CPA)) to the competent Customs Office for review, and shall transmit the inventory list to the CPT Single Window System. Upon approval by the competent Customs Office, electronic media storage may be used in lieu of paper documents for submission to the competent Customs Office for review.In the event of errors discovered after the completion of the physical inventory referred to in Paragraph 1, offshore island duty-free shops shall apply to the competent Customs Office for a re-inspection prior to the transfer or sale of the goods in question. Upon verification by the competent Customs Office, offshore island duty-free shops may amend the inventory report. However, applications for re-inspection and amendment submitted more than fourteen days after the inventory date shall not be accepted.Offshore island duty-free shops shall, within two months commencing from the day following the annual physical inventory date, prepare the settlement report in computerized form based on the previous year’s settlement report, the current year’s inventory list, account books, import and export declarations, warehouse transfer applications, and other records of goods received into and released from the self-provided bonded warehouses, as well as records of write-offs and disposals. The shops shall submit one hard copy of the settlement report and two copies of the same stored in electronic media to the competent Customs Office for review. However, upon approval of the competent Customs Office, the submission of the hard copy may be replaced by electronic media for review.Offshore island duty-free shops may apply to the competent Customs Office for approval to conduct the annual physical inventory on a non-stop basis or outside regular working hours. In the case of an application for a physical inventory conducted outside regular working hours, the competent Customs Office shall collect a special inventory inspection fee pursuant to the Regulations Governing Collection of Customs Fees.