More Advantages Added to Free Trade Zones

        At a meeting of the working group of the Free Trade Zone Coordinating Committee of the Executive Yuan on Dec. 20, 2005, a decision was made to relax the calculation of taxable price for goods shipped by free-trade-zone enterprises to tax-liable areas following repackaging or simple processing. In principle, this calculation will follow the same standard as that for processed and manufactured products shipped to tax-liable areas; that is, the taxable price will include only the price of untaxed imported and domestically produced bonded materials and semi-finished products. This makes the imposition of tariffs on goods that are shipped from free trade zones to tax-liable areas following repackaging or simple processing more reasonable, and heightens the willingness of operators to locate in free trade zones.

　　During the meeting, the working group also discussed the draft “Operating Instructions for Approval of Applications for Commissioned Processing by the Free Trade Zone Coordinating Committee of the Executive Yuan.” The commissioning of processing by free-trade-zone enterprises that engage in logistics operations will have a major impact on the national economy, and those enterprises that receive approval from the committee will be allowed to commission companies outside the zones to carry out substantive processing. This will facilitate the linkage of supply chains between logistics enterprises within the zones and manufacturing companies outside, permitting the optimization of overall industrial effect and stimulating the development of linked domestic industries.

　　The executive branch will carry out further studies of the feasibility of expanding processing by free-trade-zone enterprises on commission from companies outside the zones, and of the commissioning of processing among companies inside the zones. The implementation of this relaxation will greatly increase the operating flexibility of zone enterprises and help them to link with the supply chains of domestic companies. It will also provide a stronger incentive for logistics enterprises from all over the world to set up operations inside the zones.

　　According to information from the working group, the promotion of investment within Taiwan’s free trade zones is steadily gathering steam and the inauguration of the Taoyuan Free Trade Zone at the end of 2005 will attract more world-class logistics enterprises than ever to invest in the zones.

Back to News Page