The Regulations Governing the Establishment and Administration of Duty-free Shops (hereinafter referred to as Duty-free Shops Regulations) is herein under defined pursuant to Article 61, Paragraph 4 of the Customs Law.

The Duty-free Shops Regulations define the provisions governing the establishment and administration of duty-free shops. Where matters are not covered in the Duty-free Shops Regulations, the pertaining governing laws and regulations shall apply.

Duty-free shop are classified into two types:
1. An airport or harbor duty-free shop located inside the restricted zone of an international airport or harbor that may open a city duty-free outlet or store upon due Customs authorization.
2. A city duty-free shop outlet located in an urban center near an international airport or harbor, or within a Customs authorized zone or area.

An airport or harbor duty-free shop is authorized to sell duty-free goods to departing, transiting and arriving passengers or travelers upon presentation of a passport ,travel documents,or an Alien Resident Certificate.
The city duty-free outlet or city duty-free shop of a duty-free shop is only authorized to sell duty-free goods to departing tourists or travelers upon presentation of a passport or travel documents,or an Alien Resident Certificate.

Where purchases made at a city duty-free outlet or city duty-free shop of an airport or harbor duty-free shop are slated for airport or harbor pick-up upon the buyer’s departure from the country, the competent Customs Office may appoint an officer to inspect such purchases at any time as it may deem necessary.

A duty-free shop is authorized to sell foreign goods or goods purchased from the bonded warehouses, logistics centers, bonded factories, technology industrial parks, science parks, agricultural technology parks, free trade zones, or taxed zones. Duty-free goods shall be sold at fixed prices and prices shall be visibly attached to all goods.
A duty-free shop is not authorized to store or sell the Mainland China products which are not permitted for importation by the Ministry of Economic Affairs.

Purchases made in an airport or harbor duty-free shop should be paid in currencies other than New Taiwan (NT) Dollars; however, customers are entitled to pay for purchases in NT Dollars providing that the total amount of the payments does not exceed the Central Bank of China NT Dollar carrying allowance for passengers entering or departing from the country.
Purchases made in a city duty-free outlet, city duty-free shop of an airport, or harbor duty-free shop may be paid in NT Dollars or currencies other than NT Dollars, but change from the purchase(s) shall be given in NT Dollars only.

The duty exemption privileges for the duty-free shop purchases of departing or arriving passengers are as provided in the following:
1. Exemption from Customs duty: Duty-free goods are not subject to customs duties under the provisions of Article 61, Paragraph 2 of the Customs Act.
2. Exemption from Commodity tax: Duty-free goods are not subject to commodity tax as provided Article 3, Paragraph 1, Subparagraph 2 of the Statute on Commodity Tax.
3. Exemption from Business tax: Duty-free goods are not subject to business taxes under the provisions of Article 7, Subparagraph 3 of the Value-Added and Non-Value-Added Tax Law.
4. Exemption from Tobacco and liquor tax: Duty-free goods are not subject to tobacco and liquor taxes under the provisions of Article 5, Subparagraph 2 of the Tobacco and Liquor Tax Law.
5. Tobacco health and welfare surcharge exemption: Pursuant to Article 22-1 of the Tobacco and Liquor Tax Law, under the provisions of Article 5, Subparagraph 2 of the same law, duty-free goods are not subject to the tobacco health and welfare surcharge.
Duty-free shop goods sold to incoming passengers are regarded as foreign goods hand-carried into the country by passengers; hence, during customs clearance procedures, such purchases are subject to the provisions of ‘The Regulations Governing the Customs Declaration, Inspection and Release of Hand-Carried Luggage of Inward Passengers’. In the case where the quantity of such goods exceeds the duty exemption limit, passengers shall pay the pertaining customs duty, commodity tax, tobacco and liquor tax, tobacco health and welfare surcharge, and business tax.