China Plugs Cross Border e- Commerce Import Tax Loophole

Recently the Chinese government released a circular to specifically clarify import tax policies for goods imported under the cross border e-Commerce model, regaining control of its loosely regulated cross border e-Commerce market. The Circular, which will come into force as of April 8, 2016.
Meanwhile, the new policies set a limit of RMB 2000 for a single transaction and RMB 20000 for yearly transactions. Transactions within the limit enjoy a temporary zero percent tariff rate, but are still subject to import VAT and consumer tax, which are charged at 70 percent of the taxable amount under the general trade model.
Previously, aiming to reduce the pressure on local manufacturers and customs, the new policy will inevitably increase costs and tax burdens for foreign exporters engaging in the cross border e- commerce industry.

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