Offshore Islands Development Act Article 10-1

To promote tourism in offshore islands, those who establish offshore island duty-free stores in the Penghu, Kinmen, Matsu, Ludao (Green Island), Lanyu, and Liuqiu areas shall, after obtaining approval from the county (city) competent authority, shall register with Customs to conduct the sale to visitors of goods to be taken out of offshore islands.Goods imported and stored for sale by offshore island duty-free stores shall be bonded and stored in bonded warehouses in accordance with the Customs Act.Goods sold by offshore island duty-free stores shall be subject to a zero rate of business tax.Goods purchased from abroad or from a bonded area that are brought in and stored for sale by an offshore island duty-free store, sold to a visitor within the range of a certain monetary value or quantity, and taken by the visitor out of offshore islands, shall be exempted from customs duty, commodity tax, tobacco and alcohol tax, and the Health and Welfare Surcharges of tobacco products.Bonded goods imported and stored for display and sale to visitors by an offshore island duty-free store may be exempted from the requirement for Chinese labeling, except in the case of drugs and medical devices.Domestically manufactured goods that are brought in and stored for sale by an offshore island duty-free store, sold to a visitor within the range of a certain monetary value or quantity, and taken by the visitor out of offshore islands, shall be exempted from commodity tax, tobacco and alcohol tax, and the Health and Welfare Surcharges of tobacco products.Regulations concerning the qualifying conditions, application procedures, registration of and changes in the establishment of offshore island duty-free stores, the monetary values and quantities as referred to in paragraph 4 and paragraph 6, the persons to whom sales may be made, the customs clearance procedures, the management of the delivery of goods, and other matters requiring compliance, shall be prescribed by the Ministry of Finance.If an offshore island duty-free store violates the regulations concerning application for or change or re-issuance of registration, the monetary value and quantity of sales or persons to whom sales may be made, customs clearance procedures, the management of the delivery of goods, or other matters requiring compliance, as referred to in the preceding paragraph, Customs may issue a warning or impose a fine of not less than NT$ 6,000 and not more than NT$30,000 and may order an improvement within a certain period of time; the fine shall be charged per violation in case of failure to improve before the given deadline. If there is no improvement after three penalties, may be punished by suspension of business for between three months and one year.Where the quantity or the amount of goods sold to a visitor by an offshore island duty-free store exceeds the limits as referred to in paragraph 4 and paragraph 6, the buyer may not take the goods out of offshore islands until after making supplementary payment of customs duty, commodity tax, tobacco and alcohol tax, the Health and Welfare Surcharges of tobacco products, and business tax, as calculated in accordance with the Customs Act, the Commodity Tax Act, the Tobacco and Alcohol Tax Act, and the Value-added and Non-value-added Business Tax Act.