China: Import tax policies, cross-border e-commerce involving retail goods

China: Import tax policies, cross-border e-commerce

To foster a “fair market” environment and to facilitate the development of cross-border e-commerce for retail imports, two circulars were issued by the authorities in March 2016 to address the tax policy for cross-border e-commerce—that is, business-to-customer or “B2C” imports of retail goods. The new measures are effective 8 April 2016.

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Imported retail goods that are purchased in cross-border e-commerce transactions are subject to import tariff duties as well as value added tax (VAT) and consumption tax in China. Previously, these imported goods were taxed with reference to the tax rate of personal articles and postal items. Under China’s customs law establishing import and export duties, the tax rate for personal articles only applies to the value of imported goods that does not exceed a “reasonable amount” for personal use and is of a “non-trade nature.”

March 2016 circulars

The first item of guidance—Cai Guan Shui [2016] No. 18 (24 March 2016), and known in English as: “Circular of the Ministry of Finance, General Administration of Customs and State Administration of Taxation on the tax policy for cross-border e-commerce retail imports”—was issued to adjust the tax policy for cross-border e-commerce retail B2C imports. 

Because there are other channels for importing personal goods into China, in addition to the cross-border e-commerce “channel,” a second guidance item was issued to improve the policy concerning the import tax imposed on imported goods. The second circular—Shui Wei Hui [2016] No. 2 (16 March 2016) and known in English as: “The circular of the Customs Tariff Commission of the State Council on issues pertaining to the adjustment of import tax for imported articles”—was issued to revise the classification of imported articles and to adjust corresponding import tax rates of imported articles. 

These two circulars have an effective date of 8 April 2016.


Read a March 2016 report [PDF 227 KB] prepared by the KPMG member firm in China: China’s new import tax policies for cross-border e-commerce worth the attention of the whole industry 

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