Tax rules on online buying changed from April 8
CHINA will change the tax rules on online retail goods from April 8 to level the playing field for e-commerce platforms and traditional retailers and importers.
Retail goods bought online will no longer be classed as “parcels,” which enjoy a “parcel tax” rate, below that on other imported goods. Instead, online purchases from overseas will be charged in the same way as any other imported goods, the Ministry of Finance has said.
“Parcel tax is not for trade purposes, which is exactly what online retailing is. It is unfair to conventional importers and domestic producers,” said Zhang Bin of the Chinese Academy of Social Sciences.
China levies parcel tax on imported goods worth below 1,000 yuan (US$150), and the rate is mostly 10 percent. Taxes under 50 yuan are waived. As demand for overseas goods grows, online purchasing agents have taken advantage of parcel tax and used new methods such as repackaging and mailing products separately to avoid tax.
The new policy only allows a maximum of 2,000 yuan per single cross-border transaction and a maximum of 20,000 yuan per person per year. Goods that exceed these limits will be levied the full tax for general trade, the ministry said.
According to a 2015 survey by Amazon China on online imports, most buyers are under 35 and around 90 percent have a college education. More than half earn more than 5,000 yuan per month.
The new policy will speed up customs clearance so consumers will receive most orders from overseas within two weeks, instead of the current two months.
Cross-border e-commerce is booming in China. More cross-border e-commerce pilot zones will be set up to draw businesses, create jobs and nurture new business models that will boost foreign trade and stimulate the economy, the State Council said in January.
The expansion of the pilot zones occurred when China is facing weak foreign trade. Total value of foreign trade in 2015 fell 7 percent annually, falling for the first time in six years.
Retail goods bought online will no longer be classed as “parcels,” which enjoy a “parcel tax” rate, below that on other imported goods. Instead, online purchases from overseas will be charged in the same way as any other imported goods, the Ministry of Finance has said.
“Parcel tax is not for trade purposes, which is exactly what online retailing is. It is unfair to conventional importers and domestic producers,” said Zhang Bin of the Chinese Academy of Social Sciences.
China levies parcel tax on imported goods worth below 1,000 yuan (US$150), and the rate is mostly 10 percent. Taxes under 50 yuan are waived. As demand for overseas goods grows, online purchasing agents have taken advantage of parcel tax and used new methods such as repackaging and mailing products separately to avoid tax.
The new policy only allows a maximum of 2,000 yuan per single cross-border transaction and a maximum of 20,000 yuan per person per year. Goods that exceed these limits will be levied the full tax for general trade, the ministry said.
According to a 2015 survey by Amazon China on online imports, most buyers are under 35 and around 90 percent have a college education. More than half earn more than 5,000 yuan per month.
The new policy will speed up customs clearance so consumers will receive most orders from overseas within two weeks, instead of the current two months.
Cross-border e-commerce is booming in China. More cross-border e-commerce pilot zones will be set up to draw businesses, create jobs and nurture new business models that will boost foreign trade and stimulate the economy, the State Council said in January.
The expansion of the pilot zones occurred when China is facing weak foreign trade. Total value of foreign trade in 2015 fell 7 percent annually, falling for the first time in six years.
