China imposes a tax on goods from the Internet

In China, new rules come into force that increases taxes on goods imported via the Internet. The new rules were announced by the Ministry of Finance and the General Administration of Customs, as well as the State Administration of Taxes and Duties. The updated rules entered into force on April 8, 2019.

Retail products imported by consumers through the Internet, classified as “parcels”, are subject to “personal tax on postage” in a total of 10% of goods priced at less than 1,000 yuan (USD155). Tax payable in accordance with RMB50 has been abolished.

New tax rules have been introduced to create more equal conditions for other imported goods sold by Chinese domestic retailers. The rapid growth of cross-border e-commerce has forced many online retailers to use old tax rules, for example, to split product packages to avoid additional taxation.

Now, on April 8, taxable cross-border online transactions are limited to a maximum of 2,000 yuan per transaction, and 20,000 yuan per person each year. Goods that exceed these limits are treated as ordinary imports and may be subject to variable tariffs, a 17 per cent general value-added tax (VAT), and consumption tax payable on luxury or non-essential items such as alcohol, gasoline, jewellery products and cars.

However, with the introduction of new rules, tariffs for online imports will remain at zero, and VAT and consumption tax will be levied at 70 per cent of normal rates.

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