Customs Valuation in Taiwan: The Six Methods in Order

A declared value is a starting point, not a conclusion. Where Customs doubts it and the importer cannot resolve the doubt, the law sets out five alternative methods in a fixed order — and each step down the ladder generally produces a higher base than the one before.

Last updated:2026-08

Transaction value comes first, but it is not automatic

Under Article 29 of the Customs Act (關稅法), duty on goods assessed ad valorem is computed on the transaction value — the price actually paid or payable by the buyer.

The same article also provides that where Customs doubts the truth or accuracy of the documents submitted, and the taxpayer cannot resolve that doubt after being given the opportunity, the goods may be treated as not valuable at transaction value.

That provision is the hinge of the whole system. What you declare is where the assessment starts, not where it ends.

The six methods in sequence

The order is fixed. Each method applies only where the one before it cannot:

Order	Method	Basis
1	Transaction value	Price actually paid or payable for the goods
2	Transaction value of identical goods	Goods produced in the same country, alike in all respects
3	Transaction value of similar goods	Same country, commercially interchangeable in function
4	Deductive value	Unit price at which the goods are sold domestically, less specified deductions
5	Computed value	Production cost, profit and general expenses
6	Reasonable method	Determined reasonably on the principles of the preceding methods

A taxpayer cannot select a method. The single exception is that the order of the fourth and fifth may be reversed on application.

What triggers a review

Three situations account for most of them.

A value well below comparable imports. Customs holds historical declaration data and compares against it. Where the same goods are routinely declared at NT$3,000 and yours is at NT$300, an explanation is required.

A relationship between buyer and seller. Transactions between related parties may not reflect open-market pricing. Relationship alone does not invalidate the value, but it must be shown that the relationship did not influence the price.

Documents that do not corroborate. A handwritten receipt with no payment record, or an invoice whose amount differs from the remittance, leaves the transaction value unsupported regardless of whether it is true.

Discounts are lawful — evidence is the issue

Clearance sales, volume discounts and long-standing customer pricing are ordinary commercial reality. The problem is never the low price; it is the inability to substantiate it.

Documents that normally settle the question:

• The contract or purchase order stating the discount terms
• The commercial invoice, matching the contract
• Payment evidence — remittance advice or card statement — matching the invoice
• The basis of the discount policy, showing it applies consistently

Three documents agreeing on the same figure carry more weight than any explanation. Conversely, an invoice for NT$300 against a payment of NT$3,000 is very difficult to sustain whatever the narrative.

Which costs belong inside the value in the first place is covered in How customs value is calculated.

How the outcome flows through

The determined value replaces the declared value as the base for everything above it:

Item	Effect
Customs value	Raised to the determined figure
Duty	Rises with the base
Commodity tax, if applicable	Rises with the base
Business tax	Rises with all of the above

Because the layers stack, a valuation adjustment does not increase the bill proportionally — it increases it more than proportionally. See Duty, business tax and commodity tax.

Challenging a determination

A taxpayer may apply for review under the Customs Act, and pursue administrative appeal and litigation if still dissatisfied.

The time cost is substantial, and the goods are usually waiting. In practice, producing complete documentation during the valuation stage resolves far more cases than any appeal, and does so before storage charges accumulate — see Parcel held at Taiwan Customs.

Three things to do in advance

Keep the full transaction trail. Contract, invoice, payment evidence and freight documents, with figures that reconcile. This serves valuation queries and post-clearance audit equally — see What tariff misclassification costs.

Prepare an explanation for genuinely low prices before declaring. Clearance stock, damaged goods and samples are legitimate; assembling the evidence before the shipment moves is far cheaper than assembling it while storage runs.

Establish a pricing basis for related-party transactions. Transfer pricing documentation, or comparison against prices charged to unrelated buyers, is the material that shows the relationship did not influence the price.

What the alternative methods look like in practice

The list of six is easy to state and harder to picture. Briefly, what each actually involves.

Identical and similar goods are the two most commonly applied after transaction value, and they work from Customs' own records of what comparable goods were declared at around the same time. "Identical" means alike in all respects; "similar" means commercially interchangeable in function and characteristics. In both cases the comparison must be to goods produced in the same country.

Deductive value works backwards from the domestic selling price. Customs takes the unit price at which the goods are sold in Taiwan and deducts the elements that were added after import — commission or profit and general expenses, domestic transport, and the duties and taxes themselves. It suits goods with an established local resale price and works badly for anything novel.

Computed value builds forwards from the cost of production, adding profit and general expenses. It requires cooperation from the producer, which is why it is rarely practical for an arm's-length import and why the option to swap its order with deductive value exists.

The reasonable method is a residual. It permits a determination on the principles underlying the earlier methods where none of them can be applied directly, with flexibility rather than a new basis.

Why the sequence favours the importer

The fixed order is often read as a constraint on the taxpayer. It is more accurately a constraint on Customs.

Transaction value sits first because the price actually paid is the most objective figure available, and the law requires it to be used unless there is a specific reason not to. Each subsequent method is progressively further from the actual transaction and closer to an estimate. Requiring them to be applied in order, and only when the prior one fails, prevents an assessment from jumping straight to whichever basis produces the highest number.

This is why documentation matters so much. The importer's leverage is entirely in keeping the assessment at step one. Once it moves past that, the methods available are ones the importer has little visibility into and no control over.

Further reading

For the tax structure the value feeds into, see the Taiwan import tax guide. For what belongs in customs value, see How customs value is calculated. For the classification question that runs alongside it, see The complete HS Code guide.

Primary source: Customs Act (關稅法), Articles 29 to 35 on the determination of customs value.

Frequently asked questions

Why would Customs not accept my declared value?

Under the Customs Act, transaction value is the preferred basis, but where Customs doubts the truth or accuracy of the documents and the taxpayer cannot resolve that doubt, transaction value may be set aside. Common triggers are a value far below comparable imports, a relationship between buyer and seller, and documents that do not corroborate the figure.

Can I choose which valuation method applies?

No. The methods apply in a fixed sequence — transaction value, identical goods, similar goods, deductive value, computed value, and finally a reasonable method. The only flexibility is that a taxpayer may apply to reverse the order of the fourth and fifth.

How much more will I pay if my value is rejected?

There is no fixed multiple. The declared figure is replaced by a value determined under the applicable method, which is generally higher, and duty and business tax rise with it. The size depends on the comparison basis Customs applies.

My supplier gave me a genuine discount — is that a problem?

Discounts are lawful; the question is evidence. A contract or order stating the discount terms, an invoice matching it, and payment records matching the invoice will normally support the declared value. A low figure with no supporting basis will not.

What can I do if I disagree with the determination?

Apply for review under the Customs Act, and if still dissatisfied, pursue administrative appeal and litigation. In practice the more effective route is producing complete documentation at the valuation stage, because the goods are usually waiting while the process runs.