The “April 8th New Deal” and cross-border e-commerce tax policy adjustments and their impact

The “April 8th New Deal”, the cross-border e-commerce retail import tax policy, was officially implemented on April 8, 2016. The New Deal has had a profound impact on the cross-border e-commerce industry. On the one hand, it has increased the cost of some goods, and on the other hand, it has promoted the standardized development of the industry.

Main contents of the New Deal

The new policy clarifies the tax policy for cross-border e-commerce retail imported goods, changing the original personal postal tax to a comprehensive tax burden consisting of customs duties, value-added tax, and consumption tax. The single transaction limit for imported goods is adjusted from 1,000 yuan to 2,000 yuan. Customs duties are exempted within the limit. Value-added tax and consumption tax on imports are levied at 70% of the statutory tax payable. Outside the limit, the full amount is taxed according to the general trade method.

For example, if a diaper with a pre-tax price of 120 yuan is levied according to the personal postal tax, it meets the tax exemption regulations within 500 yuan, so the actual tax is 0; if the tax is levied according to the cross-border e-commerce comprehensive tax , the tax is 14.28 yuan (120×11.9%), which is 14.28 yuan more expensive after the tax reform. Low unit price imported cosmetics and affordable luxury clothing will also bear higher taxes and fees. A lotion with a pre-tax price of 99 yuan, if the tax is levied according to the personal postal tax (99×50%), it meets the tax exemption regulations within 500 yuan, so the actual tax is 0; if the tax is levied according to the cross-border e-commerce comprehensive tax The fee and tax are 32.57 yuan (99×32.9%), which is 32.57 yuan more expensive after the tax reform. However, for a lotion with a pre-tax price of 200 yuan, if the tax is levied according to the personal postal tax, the tax is 100 yuan (200×50%); if the tax is levied according to the cross-border e-commerce comprehensive tax, the tax is 65.8 yuan (200×32.9%), it became 34.2 yuan cheaper after the tax reform.

Impact on cross-border e-commerce

Short-term impact

The “April 8th New Deal” has had an impact on cross-border e-commerce in the short term, especially on small and medium-sized cross-border e-commerce companies, which may cause them to withdraw from the market. The implementation of the new cross-border e-commerce tax system is of great significance. It marks the end of the past cross-border e-commerce pilot work. The model and status of cross-border e-commerce are determined from the most basic level of “taxation”, which represents the positive attitude of the country and the government towards the development of the cross-border e-commerce industry.

Long-term effects

Although the prices of some products will increase in the short term and some start-up companies will be eliminated, the core advantage of cross-border e-commerce – the efficiency advantage of the supply chain has been strengthened. Cross-border e-commerce has shortened the time required for traditional import trade. links, speed up circulation efficiency, and ultimately reduce costs and time. It is absolutely positive for the mid- to long-term development of cross-border e-commerce. This tax reform has clarified the trade attributes of cross-border e-commerce and guided the industry into a large-scale and standardized development track.

Industry standardization and competition threshold

The clarity of policies has also brought about the maturity of the regulatory system. To a certain extent, the competition and threshold in the industry are not as high as before, which is conducive to full competition in the entire industry. In the future, bonded warehouses and bonded logistics will no longer be the monopoly advantages of a few large e-commerce platforms. More ports and regulatory areas with regulatory conditions can carry out bonded import business. In the long run, this will be beneficial to small and medium-sized e-commerce.

Conclusion

The implementation of the “April 8th New Deal” has had an important impact on the cross-border e-commerce industry. It has had an impact on cross-border e-commerce in the short term, but in the long run, it will help promote the standardization and healthy and sustainable development of the industry. Cross-border e-commerce companies need to take advantage of the supply chain to reduce costs, adjust product categories to adapt to new tax policies, and ensure product quality and supply chain efficiency.