Cross Border e-Commerce in China: Regulatory Updates and Trends

Apr.22, 2018


With cross border e-Commerce (CBEC) taking an increasing bigger share of the total import and export market, it is of no surprise that the government has taken CBEC regulations more seriously. As consumer complaints and industry speculation over unfair competition increase, regulatory authorities have taken notice.

Foreign companies seeking to pursue business opportunities in China’s booming CBEC market, especially those do not have a business entity in China, need to closely examine the fast changing CBEC rules and regulations.

CBEC tax reforms

Prior to April 8, 2016, CBEC purchases in “reasonable quantity for personal use” would be treated as personal parcels subject to parcel tax at rate of 10 percent, 20 percent, 30 percent, and 50 percent, depending on the type of goods. And the parcel tax was exempted if the payable tax amount was lower than RMB 50 (US$7.91).

Nevertheless, on April 8, 2016, this preferential tax policy of treating CBEC packages as personal parcels was overturned, with the so called “April 8 New Policy”—Notice on Taxation Policies for CBEC Retail Imports (Cai Guan Shui [2016] No.18)—coming into force. According to the April 8 New Policy, consumers purchasing goods through CBEC, the electronic information of which can be accessed by the customs, need to pay import taxes including tariffs, value added tax (VAT), and consumption tax (if applicable), though single transactions under RMB 2,000 (around US$317) and yearly transactions under RMB 20,000 (US$3,170) enjoy a temporary zero percent tariff rate and reduced import VAT and CT rates charged at 70 percent of the taxable amount under the general trade. Tax exemptions are no longer available.

CBEC positive lists and the delayed implementation

Right after the new CBEC tax policy came out, the MOF issued the first “List of CBEC Retail Imports” (the “positive list”), restricting the scope of goods that can and be sold over CBEC.




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