Inventory Relaxation Cuts Operating Costs for FTZ Enterprises

At a recent meeting, the Free Trade Zone Coordinating Committee of the Executive Yuan decided to relax the rules further and implement more flexible management by following two principles for annual inventories by FTZ enterprises: management by industry, and management by whether or not an FTZ enterprise have goods that require inventory. This change is expected to enhance the operating efficiency of zone enterprises.

Article 20 of the Act for the Establishment and Management of Free Ports stipulates that FTZ enterprises must, each year, commission a CPA to carry out an annual inventory. The purpose of this rule is to enhance the fairness and objectivity of annual inventories by FTZ enterprises, and to provide a basis for exemption from or levying of tariffs. Because of the diversity of FTZ operations at the present time, however, the lack of management by industry creates problems of application for some enterprises. The method of more flexible management was worked out during a meeting of related agencies, called by the Ministry of Finance.

Under the new rules, FTZ enterprises that engage in processing or manufacturing, or that engage in logistics and commission outside enterprises to carry out processing or manufacturing that actually changes the form of goods, will still have to commission CPAs to carry out annual inventories, and their CPA-certified inventory lists and budget reports will have to be submitted to Customs. Other FTZ enterprises will be exempt from the CPA inventory requirement, and will be allowed to carry out their own inventories.

The new rules will be available for application following a formal interpretation by the FTZ Coordinating Committee. For further details, please visit this website: http://www.cepd.gov.tw/m1.aspx?sNo=0009186&key=&ex=%20&ic=&cd=.

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