The Ministry of Finance ("MOF") recently issued a tax ruling (Ref. No.: Tai-Cai-Guan-Zi-1091015146, the "Ruling"), dated July 6, 2020, clarifying its principles of handling when the customs considers the tariff classification for imported goods inappropriate and changes such tariff classification accordingly. The MOF elaborates the distinction between the following two situations:

 

I.              Where the tariff classification change is recurrent and would be generally applied to other cases, based on the principle of equality, such a tariff classification change shall be issued in the form of a MOF ruling, and shall be published in the Executive Yuan Gazette, pursuant to Subparagraph 2, Paragraph 2 of Article 159 and Paragraph 2 of Article 160 of the Administrative Procedure Act. Furthermore, such a tariff classification change shall become effective only from the publication date (or from another date in the future designated by the MOF).  In this situation, the new tariff classification rule would not be applied retroactively, and so the imported goods shall be taxed according to the original tariff classification and so there will be no shortage of payment or overpayment for the customs duties. The Ruling lists several circumstances under which the current tariff classification rule might be changed, including: (I) The previous opinion provided by the MOF regarding the existing tariff classification is inappropriate; (II) The previous opinion provided by the MOF in an advance tariff classification ruling is inappropriate; (III) The World Customs Organization (WCO) revised its explanatory notes to the Harmonized System, or the other documents referenced by the MOF are changed.

 

II.           On the contrary, in the situation where the tariff classification change is not recurrent and would not be generally applied to other cases, then, for the specific case, if the customs considers the tariff classification declared by the importer to be inappropriate, it has the power to change the tariff classification of the imported goods, and to levy the shortage of customs duties payment or to refund the overpayment of customs duties, pursuant to Article 18 of the Customs Act.  If the payer of the customs duties is discontented with the customs decision, it may, pursuant to Article 45 of the Customs Act, file an application for reassessment with the customs within 30 days after its receipt of the customs duties payment certificate.  If the payer of the customs duties remains discontented with the customs' decision made in the reassessment, it may file an administrative appeal with the MOF as well as the subsequent administrative litigation with the court, to claim its right in the specific case.