●Feasibility and benefit of cross-border e-commerce business
Under the new rules, goods exceeding the published tax threshold will be subject to duty/import VAT as under General Trade. It is currently unclear whether this would also mean that other General Trade requirements, such as licensing and inspection, would also apply. Such requirements could jeopardize the utilization of a cross-border e-commerce model on certain goods, for example, luxury apparel usually exceeding RMB 2,000 and with a high possibility of being subject to mandatory inspection.
With the new measures and the changes on postal tax rates, management should perform a detailed analysis to assess the potential duty and tax implications, and potentially are assessment of business models available under B2C and B2B2C.
●Interaction with the 13 pilot national- level cross-border e-commerce pilot cities
The new measures are expected to apply to all cities, including those cross-border e-commerce pilot cities. As the pilot cities will take the lead in setting new standards for cross-border e-commerce transactions, payment, logistics, customs clearance, exchange settlement, inspection quarantine, etc., there may be other non-tax conveniences that these pilot cities can offer. It should be noted that given the local governments will be in charge of releasing its own detailed plan, there may be variations among different e-commerce pilot cities in practice.
To effect the implementation of the new policy, please take note that there are other nuances such as complying with the customs clearance formalities with sufficient documentation for each declaration or shipment. If in doubt we would be happy to share further insights and local practices in these areas.
No. 5 Yongxin Road, Wangzhuang Town, Changshu City, Jiangsu Province, China