Mainland China - New Policies to Regulate Cross-Border E-Commerce Retail Import Business

The Chinese government recently released a new policy through Circular 18 to adjust the tax policies on cross-border e-commerce retail business and imported articles. Cross-border importers must follow new procedures to export and import to Mainland China. Companies in the e-commerce industry have to take into account the newly introduced regulations as it impacts altered cost, operational efficiency, quality of services and compliance risks. What has changed so far?

What is the new procedures e-commerce retailers now have to follow? 

  • Cross-border e-commerce retail imports will have to stick to a control list management. The list includes 1142 items which mainly are consumer goods in demand for the domestic market.
  • Companies which import goods from the item list are exempt from submitting import license to the customs authorities. However, importers still have to go through inspection and submit to PRC’s quarantine procedures.

What materials cross-border e-commerce importers have to submit to Customs Authorities? 

What about tax policies for e-commerce business? 

The newly introduced policies have to be carefully studied by e-commerce cross-border retailers import and export business. Indeed, they should pay attention to the following statements: 

  • Imported cross-border e-commerce retail goods are subjected to import tariff, import VAT and consumption tax are dutiable values.
  • Imported cross-border retail goods’ limit for a single transaction is 2,000RMB and 20,000RMB for individuals. For e-commerce retail goods imported within the limit,  0% interim tariff rate applies.
  • Import VAT and consumptions tax are no longer exempt and are temporarily levied at 70% of statutory taxable amounts. If the limit for both retailers and individuals is not respected, the transaction will be levied in full as general trade.
  • If imported cross-border ecommerce retail goods are returned within 30 days after custom release, individuals can apply for tax refunds.
  • Tax rates for imported articles depends on the following three categories of products: 

What are the advantages of the new policy?

However, e-commerce retailer enterprises should pay attention to several items which remain unclear and have to wait for further clarifications:

  • The List of authorized Imported Cross-Border E-commerce Retail goods has not been released yet
  • The Circulars is silent on specific quality inspection, control and quarantine regulations 
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