New tax pol­icy reg­u­lates cross-bor­der e-com­merce

China Daily (Canada) - - BUSINESS - ByWUYUNHE

Ioften re­ceive short mes­sages from’s on­line re­tail­ers these days, which say “grasp the last chance to click for more cross-bor­der pur­chases at the cur­rent price un­til April 8 when a new­tax sys­tem on cross-bor­der e-com­merce sales will be­come ef­fec­tive”.

The new tax­a­tion pol­icy, an­nounced by the Min­istry of Finance, the General Ad­min­is­tra­tion of Cus­toms and the State Ad­min­is­tra­tion of Tax­a­tion last week, led to a heated de­bate in my of­fice. Some of my col­leagues said they hadn’t made any cross­bor­der pur­chases be­cause many on­line re­tail­ers were nei­ther hon­est nor of­fered good post-sales ser­vices.

Many cus­tomers have shared their poor ex­pe­ri­ences on the In­ter­net on how they were cheated by cross-bor­der re­tail­ers.

How­ever, I don’t be­lieve re­tail­ers will cheat cus­tomers ev­ery time. Howthen could the coun­try’s cross­bor­der e-com­merce and overseas con­sump­tion have reached hun­dreds of bil­lions of yuan a year?

I am quite unique in the eyes of some of my col­leagues as I told them I had done cross-bor­der shop­ping many times and sel­dom had an un­pleas­ant ex­pe­ri­ence. My ex­pe­ri­ence is to make sure you are very familiar with the brands, prices and pack­ag­ing of the prod­ucts that you want to buy on­line, and don’t for­get to re­fer to other shop­pers’ com­ments.

In fact, I ama­mong the hun­dreds of millions of Chi­nese con­sumers who of­ten click for cross-bor­der shop­ping.

I con­fess I will be quite an­noyed if I have to pay much more for cross-bor­der shop­ping on plat­forms as Tmall or JD be­cause of the new tax­a­tion pol­icy.

A ma­jor rea­son that makes me keep do­ing cross-bor­der shop­ping is that it is eco­nom­i­cal to buy di­etary sup­ple­ments from on­line cross­bor­der re­tail­ers. The on­line price of a bot­tle of Na­ture’s Bounty Cal­cium soft­gels, which is branded and made in the United States, is 50 yuan ($7.6) to 100 yuan cheaper than that in bricks-and-mor­tar stores on av­er­age.

Ac­cord­ing to China’s cur­rent tax­a­tion sys­tem on per­sonal postal ar­ti­cles, goods with taxes un­der 50 yuan are ex­empt from cus­toms du­ties.

China now levies per­sonal postal ar­ti­cles tax on im­ported goods, which are un­der 1,000 yuan, and the tax rate is gen­er­ally 10 per­cent. So, in this case if I did a cross-bor­der pur­chase of Na­ture’s Bounty’s cal­cium and fish oil prod­ucts at a to­tal price of 499 yuan on Tmall, the tax would be only 49.9 yuan so that I can en­joy duty-free treat­ment, ac­cord­ing to the cur­rent tax pol­icy.

This is why the cross-bor­der e-com­merce is quite pop­u­lar com­pared with off­line im­ports, as the tax bur­den level is rel­a­tively low.

As more peo­ple de­mand overseas goods, many on­line pur­chas­ing agents have taken ad­van­tage of the per­sonal postal ar­ti­cle tax, ditched the old way of whole­sal­ing and adopted new meth­ods such as repack­ag­ing and mail­ing prod­ucts sep­a­rately to seek cus­toms ex­emp­tion.

Of­fi­cial sta­tis­tics showed that in 2014, Chi­nese shop­pers’ pur­chases of im­ported goods on­line reached 476.3 bil­lion yuan, how­ever, the per­sonal postal ar­ti­cles tax was un­der 1.3 bil­lion yuan, which means a big loss of tax rev­enue to State cof­fers.

As Chi­nese cus­tomers’ overseas shop­ping spree and the cross-bor­der e-com­merce craze are spread from cities to the coun­try­side, de­spite a 7 per­cent de­crease in China’s for­eign trade in 2015, the growth rate of the cross-bor­der e-com­merce in­creased more than 30 per­cent.

As a re­sult, the im­ple­men­ta­tion of the new­tax sys­tem, which will come into ef­fect on April 8, will of­fer cross-bor­der busi­nesses as well as tra­di­tional re­tail­ers a more fair com­pe­ti­tion mech­a­nism.

Al­though the new­pol­icy means that I might have to pay ex­tra taxes formy fu­ture cross-bor­der shop­ping, it is in­deed a good thing for the na­tional econ­omy.

At the same time, the pol­icy will also help clean up the coun­try’s e-com­merce of il­le­gal ac­tiv­i­ties, so that more con­sumers will be­lieve that on­line pur­chases of overseas goods are safe, thus pro­mot­ing the fur­ther sound devel­op­ment of the e-com­merce in­dus­try.

Con­tact the writer at wuyunhe@chi­


A post of­fice worker sorts cross-bor­der e-com­merce parcels that have passed cus­toms and quar­an­tine checks in Ji­nan, cap­i­tal of Shan­dong prov­ince.

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