New Tax on Imported Goods from E-Commerce Sites will not Affect Chinese Travelers
The new tax that is imposed on imported goods that are purchased from e-commerce sites will not affect Chinese travelers buying the items abroad. The Ministry of Finance said that shoppers expressed their concerns on the new tax on foreign products that took effect last Friday, spelling trouble to outbound tourists. But the ministry stated that the new policy targets e-commerce and not individual outbound tourists.
Authority say that the rules for tourists returning from abroad remains unchanged and purchases up to the value of 5,000 yuan are exempted by duties. The new tax only relates to e-commerce platforms that allows consumers to order imported goods online and to have it delivered using postal services. The policy creates a level playing field for cross border e-commerce sites and with brick and mortar stores that sells imported goods. Meaning overall retail goods that are bought online are no longer treated as personal postal goods but as imported goods. Cross border e-commerce have boomed due the increase in demand for higher quality products among the middle class. There was a time tat these websites enjoyed an edge over others such as onshore duty free shops since they didn’t pay tariffs, consumption tax or VAT.
Retail goods that are sold through e-commerce sites will be subjected to three taxes and since all tariffs are all set to zero with a 30 percent discount on consumption tax for purchase of up to 2,000 yuan and import VAT and if only when a consumer’s annual gross transactions is under 20,000 yuan. bonded areas operators, part of e-commerce chains expressed their concerns on the tax change as the change came into effect two weeks after it was announced and several areas didn’t have enough time to clear out their inventories.
Shoppers complain that they also need to pay higher taxes on low price overseas products, before these were only subjected to 10 percent parcel tax and now subjected to a tax between 11.9 to 32.9 percent. But analysts said that some items such as cosmetics prices up to 2,000 yuan have lower tax since the previous parcel tax was at 50 percent.