What happened to China's new customs tax system for cross-border e-commerce?

[metoc15411]

According to the statistics on cross-border e-commerce in China last year (2015), the number of people using cross-border e-commerce was about 24 million. The previous year, it was 18 million, so the growth rate was 133%. The total consumption amount through cross-border e-commerce was 36.8 billion dollars, and in 2014 it was 22 billion dollars, so the growth rate was 167%, both of which show that the size of the cross-border e-commerce market in China is expanding and growing.
Also, on April 8, 2016, China changed the tariff system for cross-border e-commerce under a new system. However, perhaps because this was a sudden change, it caused confusion on the ground, and it had a major impact on cross-border e-commerce that utilized bonded areas in particular, so the Chinese government announced that it would extend the new system for cross-border e-commerce tariffs for one year.
In this article, we will look at the current state of this new tax system and the potential of cross-border e-commerce in China to replace the buying frenzy.

Figure 01



Differences between the postal tax and the new tax system
The postal tax is a tax imposed on Chinese individuals when armenia whatsapp data they bring luggage from overseas or purchase goods through cross-border e-commerce.
In the case of general cargo, in addition to customs duties, consumption tax, and value-added tax, distribution costs are added on top, so ultimately it is cheaper to purchase goods through cross-border e-commerce.


This was deemed unfair, so a new tax system was created, the postal tax was abolished, and customs duties, value-added tax, and consumption tax were levied on cross-border EC retail imports according to the contents of the goods. The
main contents of the new tax system are as follows:

The maximum purchase amount that an individual can make at one time will be raised to 2,000 yuan (currently 1,000 yuan).
The annual purchase limit for each person will be set at 20,000 yuan (as is).
The tariff rate for products purchased below the purchase amount limit is 0%.
However, if the purchase amount exceeds the limit, the same tariff rate as for general trade will be applied.
Reduce the value-added tax on imports by 30% and apply it to all (VAT 17% x 70% = 11.9%)
If consumption tax is applied (some products are subject to consumption tax), a 30% discount will be applied (for products with a consumption tax of 30%, 30% x 70% = 21%)
Abolish the postal tax and the current exemption of up to 50 yuan from personal import duties.
The table below shows how tariffs on products such as baby products, apparel, and cosmetics will change if the current postal tax is replaced by the new tax system.
Looking at this table, products over 250 RMB, such as apparel, fashion, and electrical appliances, which have a postal tax rate of 20%, will see a tax reduction. Additionally, cosmetics, which have a higher postal tax rate of 50%, which cost over 100 RMB, will also see a tax reduction.
Under the new tax system, taxes will be reduced on apparel, fashion, and electrical appliances costing over 250 RMB, and cosmetics costing over 100 RMB, and sales are expected to increase.
Additionally, the new tax system will see an increase in the upper limit on individual purchases (from 1,000 RMB to 2,000 RMB), which is also expected to be a tailwind for cross-border e-commerce.