Our country began to pilot cross-border e-commerce policies in 2012, and the taxation method has mainly gone through two stages, with April 8, 2016 as the dividing point.
1. Start-up phase (before April 8, 2016)
In the initial stage of the pilot program, the then-current travel tax was used as the tax standard, and the tax rate was divided into several fixed levels according to categories. The tax payable was simply multiplied by the declared price of the commodity by the corresponding tax rate. If the tax payable was less than or equal to RMB 50, it would be exempted according to regulations (that is, if the tax was ≤ RMB 50, no tax would be collected). I won’t go into the details, because it’s expired anyway… Answers to the tax calculation method for Amazon Global Shopping (and other cross-border e-commerce)
II. Current stage (April 8, 2016 to present)
Due to various problems and omissions found in the early stage of implementation, the state has made major adjustments to the cross-border e-commerce tax policy, mainly in three aspects:
1. Establish a positive list system. Goods outside the list cannot be cleared through cross-border e-commerce channels and can only be cleared through personal mail or general trade. This positive list was published in the form of 8-digit HS codes. Two batches of the list were released successively, with slight changes during the period due to the adjustment of HS codes. A new positive list was issued and implemented on January 1, 2019, which invalidated the previous one. However, the main content has not changed much. Only some categories have been expanded and the HS codes have been partially revised.
2. Major adjustments have been made to the way taxes are collected: stop levying taxes in the manner of travel tax and implement the method of calculating taxes in accordance with value-added tax and consumption tax, and cancel the tax-free amount. It is clearly stipulated that freight costs must be included in the price of goods to prevent tax evasion in the name of high freight costs.
3. It is stipulated that the transaction amount of a single order in the cross-border e-commerce model cannot exceed RMB 2,000, and the cumulative purchase amount per person per year shall not exceed RMB 20,000. Starting from January 1, 2019, the transaction amount of a single order cannot exceed 5,000 yuan, and the cumulative purchase amount per person per year cannot exceed 26,000 yuan.
Finally, I will focus on the calculation of tax rates and taxes. The tax calculation formula for cross-border e-commerce is:
Total price of goods = product price + shipping fee
Tariff = total price of goods * tariff rate * 0.7
Consumption tax = (total price of goods + tariff) * consumption tax rate / (1-consumption tax rate) * 0.7
VAT = (total price of goods + (total price of goods + tariff) * consumption tax rate / (1-consumption tax rate)) * VAT rate * 0.7
(The VAT is also 30% off, but please note that the consumption tax in the VAT base is not 30% off)
Total taxes = customs duty + value-added tax + consumption tax
(Both are 30% off tax)
Comprehensive tax rate = (customs duty + value-added tax + consumption tax) / total price of goods
Regarding consumption tax, currently cross-border goods, mainly some cosmetics, are subject to consumption tax. The following is a quote:
The cosmetics consumption tax policy was adjusted from October 1, 2016, and the original consumption tax item name "cosmetics" was changed to "high-end cosmetics", including high-end beauty, decorative cosmetics, high-end skin care cosmetics and complete sets of cosmetics. The definition of "high-end" is "the sales (duty-paid) price (excluding VAT) in the production (import) link is 10 yuan/ml (g) or 15 yuan/piece (sheet) and above."
Regarding value-added tax, it has undergone several adjustments. First, it was merged into two rates of 11% and 17%; then, starting from May 1, 2018, they were reduced by 1 percentage point to 10% and 16%, respectively; and from April 1, 2019, the value-added tax was reduced to 9% and 13%, respectively. Currently, most cross-border goods are subject to a 13% tax rate, with a small number of categories subject to 9%.
