Ministry of Finance Pre-announces New Electric Vehicle Tax Exemption Rules to Alleviate Upfront Payment Pressure

Central News Agency

(Central News Agency reporter Lu Yen-tzu, Taipei, May 13) The tax exemption for electric vehicles has been extended until the end of 2030. To alleviate the financial pressure faced by businesses due to the 'pay first, refund later' system, the Ministry of Finance has pre-announced new regulations. These new rules will allow manufacturers to apply for tax-exempt factory release or import, with subsequent processing after completion of license plate registration. These regulations will take effect from 2027.

Last year, the President amended and promulgated the Commodity Tax Act, extending the commodity tax reduction for electric vehicles until the end of 2030, thereby reducing the cost burden for consumers purchasing vehicles and promoting the government's phased goals for vehicle electrification.

The Ministry of Finance explained that according to current regulations, manufacturers must declare and pay commodity tax when producing vehicles for factory release in Taiwan or importing them from abroad. The tax is then refunded after the completion of license plate registration. This leads to tied-up capital and increased compliance costs, as well as increased collection, review, and refund costs for tax authorities and customs.

To alleviate the 'pay first, refund later' financial pressure that businesses may face, the Ministry of Finance pre-announced in May the draft amendment to some articles of the 'Commodity Tax Collection Rules.' The amendment adds provisions allowing manufacturers or importers to apply for tax-exempt factory release or import before the electric vehicles leave the factory or are imported, with subsequent processing after completion of license plate registration.

Considering practical operational needs, the draft amendment also specifies that if the product number is stated on the packaging of commissioned taxable goods, tax authorities can use this to verify matters related to business registration and product registration for tax management. The packaging may indicate either the name and address of the commissioned manufacturer or the commissioning manufacturer. (Editor: Yang Lan-hsuan) 1150513

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