Chinese Cross-border E-commerce Saying Farewell to Tax Free

Reliable sources such as Xinhuanet.com and People.cn have reported that China will implement a new cross-border e-commerce new tax policy from April 2016. The new tax policy will mark the completion of CBEC pilots’ work.

The most significant change in this tax reform is that personal postal articles tax lower than 50 yuan is no longer eligible for a tax waiver. The personal postal articles tax will be replaced by value added tax and excise tax in the future. This change will have an impact on products imported through bonded zones.

This tax change will also affect imported cosmetics. According to the source, the value added tax and excise tax for CBEC cosmetics will be 30% lower than normal. (The normal VAT is 17%, and the normal excise tax is 30%.) For cosmetic product whose price is lower than 100 yuan, the tax will be almost 32.9 yuan. For cosmetic product higher than 100 yuan, the tax will be reduced by 17.1%.The new CBEC tax policy will allow standard bricks and mortar companies to compete with their CBEC counterparts and also discourage tax evasion.