The China Post news staff
At least three overseas travelers were caught recently for using tax margin schemes for illegal gains by purchasing expensive products in Taiwan tax free and then re-entered the island to sell the items. The three were either ordered to make up the tax payment plus fines or see their costly items confiscated. Cho Chin-hui, an investigation department chief at the Taipei Customs Office, said three travelers from abroad have been caught for attempting to resell their purchased merchandise for profits after getting more than NT$1 million in tax refunds.
A male traveler from Hong Kong purchased three luxury watches at a total cost of NT$12 million last October to get NT$600,000 based on the 5 percent value-added tax refund at the Kaohsiung airport. But the same man returned to Taiwan just a few days later and was found carrying the same timepieces. One female Canadian traveler carried one watch worth more than NT$3 million, two rings valued over NT$4 million, and one handbag priced more than NT$2 million out of the Taiwan Taoyuan International Airport on Jan. 9. After applying for more than NT$400,000 in tax rebates she was found returning to Taiwan with the three objects on the same night. On Jan. 15, a Japanese tourist left Taoyuan with one watch and two handbags worth a total of more than NT$2.5 million with tax refunds of over NT$125,000. The man was discovered bringing the three identical items back to Taiwan via the Kaohsiung airport on the same evening. All three of the travelers had abided by the regulations while applying for the VAT tax refund upon departure. However, they failed to comply with the existing rule to claim the objects with value exceeding NT$20,000 each when entering Taiwan, said Cho. The three were ordered to make up the tax payment plus fines while some items were confiscated in accordance with the rules, he said. Cho said that the government offered the tax refund incentives to encourage travelers holding foreign passports to visit Taiwan and make purchases of products for their own use by providing smooth and convenient tax-refunding services. But some overseas travelers have abused the system by reselling the items in Taiwan for illegal profits. Cho said that all authorized tax refund shopping- (TRS) labeled stores as well as customs offices at airports and harbors throughout Taiwan have registered the purchases and compiled the tax rebate records. It will be difficult for foreign travelers to abuse the tax incentive system for illegal financial gains, he said. Cho emphasized that the government welcomes all overseas travelers to visit Taiwan with open arms. But the foreign guests should ignore ill advice from other people over the tax margin schemes if they want pleasant visits in Taiwan and if they desire to avoid legal troubles and hefty fines.