Retailers Asked to Take Advantage of Cross Border Purchases Before Implementation of New Tax Policy
Online retailers are getting messages telling them to avail of the chance for more cross border purchases at current prices before April 8 before the new tax system on cross border e-commerce sales will take effect. The new taxation policy which was announced by the Ministry of Finance and the General Administration of Customs and State Administration of Taxation led to debates that many cross border purchases were not good as several online retailers were not honest or offered good post sales services.
Customers shared their experiences in the internet on how their purchases were poorly handled by cross border retailers, but soe customers that not all retailers give poor services as the cross border e-commerce and overseas consumption reached billions of yuan a year. some say that the secret in cross border purchases is that you need to be familiar with the brands, prices and packaging of the products that you are buying online. Some are now against in paying for more cross border shopping on Tmall and JD.com due to the new taxation policy. One of the major reason why some still prefer to do cross border shopping that its economical to buy from online cross border retailers of branded items from the U.S. which is cheaper that in brick and mortar stores. Also based on the current taxation system, any personal articles or goods with taxs under 50 yuan are exempted from duties.
China will now levy personal articles tax on imported goods that are under 1,000 yuan with a 10 percent tax rate. In this case if a customer purchases personal products at 499 yuan on Tmall the tax will be 49.9 yuan and will be considered duty free based on the current tax policy. That is why cross border e-commerce is popular compared to offline imports because the tax burden is low. More people are demanding overseas goods and a lot of online purchasing agents are taking advantage of the personal article tax and ditched the old ways of wholesaling and adopted newer methods to seek customs exemption.
Overseas shopping sprees and the cross border e-commerce craze is fat spreading from cities to countryside even if there is a 7 percent decrease in the foreign trade for 2015, while the growth rate for cross border e-commerce increased by 30 percent.