At the end of November 2018, the long-awaited and cross-border new e-commerce policy was launched in China: On November 28, the Ministry of Commerce, the Ministry of Finance, and the General Administration of Customs and other 6 ministries and commissions issued “Notice on Improving the Supervision of Cross-border E-Commerce”; on November 29, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation issued the “Notice on Improving the Tax Policies for Cross-Border E-Commerce Retail Imports”. On the same day, the Ministry of Finance and the General Administration of Customs and other 13 ministries and commissions issued the “Announcement on Adjusting the List of Cross-Border E-Commerce Retail Import Commodities”. In conjunction with the “Announcement on Real-time Access to Cross-border E-Commerce Platform Enterprise Payment Related Raw Data” and the “Announcement on Issuing <Customs Certification Enterprise Standards” issued by the General Administration of Customs on November 8 and 22, respectively. This batch of new policies and regulations has a relatively high level of content, specific content and wide coverage. After January 1, 2019, China’s cross-border e-commerce retail import business has bid farewell to the “transition period” of two and a half years. Advance to the “E-commerce Law”-led “new era of cross-border e-commerce” has prepared adequate policies and regulations. The following highlights deserve our attention:
1. Clearly define the concept and scope of cross-border e-commerce retail imports.
According to the Ministry of Commerce, the Ministry of Finance, the General Administration of Customs and other six ministries and commissions issued the “Notice on Improving the Supervision of Cross-border E-Commerce Retail Import Supervision”, cross-border E-commerce retail import refers to consumers’ behaviour in China who purchase goods from overseas through cross-border e-commerce third-party platform operators, and through “net purchase bonded import” (customs supervision mode code: 1210) or “direct purchase import” (customs supervision mode code: 9610) Commodities shall be: 1. Subject to the “Cross-Border E-Commerce Retail Import Goods List”, limited to personal use and meet the requirements of the cross-border e-commerce retail import tax policy; 2. through the e-commerce trading platform networked with the customs, able to realize the “three documents” comparison of transaction, payment and logistics electronic information; 3. Not through the e-commerce transaction platform connected with the customs, but the inbound and outbound express operators and postal enterprises can accept the entrustment of relevant e-commerce companies and payment companies. Committed to bear the corresponding legal responsibilities and transmit electronic information such as transactions and payments to the customs.
According to the above definition, if the goods are not within the scope of the list or exceed the scope of personal use, the enterprise cannot transfer or entrust the relevant enterprises to transfer the transaction, payment, and logistics “three-documents” information to the customs, regardless of whether or not the e-commerce form is adopted. The relevant policy provisions for cross-border e-commerce retail imports cannot be applied (for example, the cross-border comprehensive tax for most commodities is 11.9%).
That is to say, at present, many consumers on the overseas e-commerce platform websites (such as Amazon USA) “Hai Tao” goods can only be regulated according to the postal items, and need to pay the postal tax, such as the tax rate of the cosmetics is 50%, of luggage is 25%, for food and electronic products is 15%.
2. The import tax policy: increase trading limits, emphasizing personal use.
According to the Customs Tariff  No. 49 “Notice on Improving the Cross-border E-Commerce Retail Import Tax Policy”, cross-border e-commerce retail imports are the final products used by consumers. , cannot enter the domestic market for resale. At the same time, the single transaction limit has been raised from the current 2,000 yuan to 5,000 yuan, and the annual transaction limit has been raised from the current 20,000 yuan per person per year to 26,000 yuan; for the duty-paid price exceeding the single transaction limit of 5,000 yuan but lower than For the annual trading limit of 26,000 yuan, and only one commodity under the order, it can be imported from the cross-border e-commerce retail channel, and the customs duty and import link value-added tax and consumption tax shall be levied in full according to the cargo tax rate; but the annual transaction total exceeds the annual transaction limit. , in accordance with general trade management.
|Notice on cross-border e-commerce retail import tax policy (current policy)||Notice on Improving the Tax Policies for Cross-Border E-Commerce Retail Imports （new policy 2019）|
|Single Transaction Limit||2000 Yuan||5000 Yuan|
|Annual Transaction Limit||20000 Yuan||26000 Yuan|
|A single item that exceeds a single limit but does not exceed the annual limit||in accordance with general trade management||Full taxation according to cross-border e-commerce channels and cargo tax rates|
|Goods that exceed the annual limit||in accordance with general trade management||in accordance with general trade management|
This adjustment is a major positive news for Haitao consumers and imported cross-border e-commerce. For consumers, the ceiling is increased, and a single over-capture product can be purchased through cross-border e-commerce channels, which will further meet the demand for imported consumption; For cross-border e-commerce, especially for cross-border e-commerce that sells 3C products, clothing, cosmetics, etc., which often exceed the original limit, the increase in quota means the expansion of the market and the higher value of goods. The single item fully enjoys the tax benefits of cross-border e-commerce.
3. Strengthen the ” bonded internet shopping + offline self-delivery” model supervision.
The “bonded internet shopping + offline self- delivery” model means that the experimental e-commerce enterprise can display and sell online shopping bonded imported goods in the “experience store”, and consumers complete online ordering, after checking and paying a series of compliance purchase procedures such as authenticated, cross-border payment, three-in-one information verification and cross-border tax payment, you can pick up the goods on the spot of “experience Store” or use other domestic logistics methods to complete the purchase.
At present, most of the cross-border e-commerce “Experience Stores” are set up in the bonded area, but some cross-border e-commerce companies will solve part of the operation dilemma in the bonded area, where the experience store is far away from the consumption centre and the customer experience rate is low. The “Experience Store” is located in the downtown area away from the Customs Bonded Zone. This model certainly brings more business opportunities, but it also puts higher demands on customs supervision. In practice, it is difficult for Customs to completely prevent cross-border e-commerce companies or cross-border e-commerce platform enterprises from operating the “bonded internet shopping + offline self-raising” model, and using ordinary imported goods instead of cross-border retail imports to evade taxes. Based on the above considerations, “Notice on Improving Tax Policies” emphasizes that “in principle, it is not allowed to conduct “net purchase bond + offline self-raising” mode outside the special customs supervision area. After the introduction of this policy, how do cross-border e-commerce companies apply for “net purchase bond + offline self-raising” outside the special customs supervision area, and whether the existing “experience store” needs additional review, waiting for further review.
By King & Wood Mallesons