In Taiwan, the monopoly business in the sale of the tobacco and alcohol system had been implemented for more than 50 years and during the period of monopoly tax system, the related custom duty, business tax and commodity taxes were suspended or exempted. With the change in the environment, implementing measures to work toward free economy and Taiwan's entry into the World Trade Organization, the sale of tobacco and alcohol products is no longer a monopoly business anymore and then the tobacco and alcohol tax was introduced to replace the monopoly tax system, beginning from Jan 1, 2002.
Tax Base
The tobacco and alcohol taxes are levied on the tobacco or alcohol products which are produced domestically (including the related manufacturing and packaging) or imported from abroad upon removal of tobacco or alcohol products from the factory or upon importation.
Taxpayers
The taxpayers of tobacco and alcohol taxes are as follows:
- For the tobacco or alcohol products produced domestically: the manufacturer
- For the tobacco and alcohol products manufactured on consignment basis: the consigned manufacturers. If the consignor is a manufacturer of taxable tobacco or alcohol products, the consignor may apply to the competent tax collection authority for being as a taxpayer.
- For tobacco and alcohol products imported from abroad: the receiver of the goods, the holder of the bill of lading or the holder of the goods.
- For untaxed tobacco and alcohol products auctioned off by the court or other agencies: the purchaser
- For exempted tobacco and alcohol products which are resold or used for other purposes, and thereby losing their tax-exempt status: user or the holder of the goods.
Tax Rates
- The taxable tobacco products and their corresponding tax amounts are as follows:
- Cigarettes: NT$ 1,590 per 1,000 sticks.
- Cut tobacco: NT$ 1,590 per kilogram.
- Cigars: NT$ 1,590 per kilogram.
- Other tobacco products: NT$ 1,590 per kilogram or NT$1,590 per 1,000 sticks, whichever is higner.
- Where the amount or weight of products is less than 1,000 sticks or less than one kilogram, the tobacco and alcohol tax is levied on a pro rata basis according to the above rate.
- In addition to taxes on tobacco, a health and welfare surcharge is also imposed on tobacco products as follows:
- Cigarettes: NT$1,000 per 1,000 sticks.
- Cut tobacco: NT1,000 per kilogram.
- Cigars: NT$1,000 per kilogram.
- Other tobacco products: a levy of NT$1,000 per kilogram or NT$1,000 per 1,000 sticks, whichever is higher, should be imposed.
- The taxable alcohol products and their corresponding tax amounts are as follows:
- Brewed alcoholic beverages:
- Beer: NT$ 26 per liter.
- Other brewed alcoholic beverages: NT$ 7 per liter, per degree of alcohol content.
- Distilled spirits: NT$ 2.5 per liter, per degree of alcohol content.
- Reprocessed alcoholic beverages: alcohol content exceeding 20% by volume at NT$ 185 per liter; alcohol content less than 20% by volume at NT$ 7 per liter per degree of alcohol content.
- Cooking alcoholic beverages: NT$ 9 per liter.
- Other alcoholic beverages: NT$ 7 per liter per degree of alcohol content.
- Ethyl alcohol: NT$ 15 per liter.
- Where the volume is less than a liter, the tobacco and alcohol tax is levied on a pro rata basis according to the above rate.
Tax Exemptions and Refunds
| Exemptions |
Refunds |
Tobacco or alcohol products which meet any of the following conditions could be exempt from tobacco and alcohol tax:
- Products produced to manufacture other taxable tobacco or alcohol products
- Products exported abroad.
- Products for exhibition and then returned back to the original factory or exported
- Products brought from abroad for personal purposes by tourists and the quantity does not exceed governmental limitation.
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The tobacco or alcohol paid on tobacco and alcohol products which meet any of the following conditions shall be refunded:
- Products exported abroad
- Ingredient products in order to manufacture exported goods
- Products returned to the factory or reprocessed into taxable products
- Destroyed or unqualified products
- Products physically destroyed by the flood, fire or other uncontrollable disasters during transit or storage.
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For the tax payable relating to the tobacco or alcohol products removed from the factory in the current month, the manufacturer is obligated to pay the taxes with the national treasury, prior to the 15th of the following month, to fill a tax return to calculate the tax amount in the form prescribed by the Ministry of Finance, and to file the said return as well as the tax payment receipt accordingly with the competent tax collection authority. In addition, in case where there is no tax payable, the manufacturer is still obligated to file such return.
Upon importation of taxable tobacco or alcohol products, the taxpayer shall report with the customs office and the tobacco and alcohol taxes along with customs duty will be levied by the customs office.
For the untaxed tobacco or alcohol products auctioned off by the court or other agencies, the purchaser shall report and pay the tax with the competent tax collection authority before delivery of the products.
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