In May 2016, the General Administration of Customs issued a new document on cross-border e-commerce tax reform – “Notice on the Implementation of New Regulatory Requirements for Cross-border E-commerce Retail Imports”. The document pointed out that the new tax reform policy for cross-border e-commerce will be postponed for one year. In 10 pilot cities represented by Guangzhou, Shenzhen, Shanghai and Hangzhou, the regulatory plan before the new tax reform policy was issued will be implemented, but the tax rate will be levied in accordance with the new tax reform document issued in April.
The official implementation of this document has given many cross-border e-commerce platform operators who have suffered product price increases and a large number of users lost due to policy adjustments a chance to breathe. However, there are still a large number of practitioners who hold a negative attitude towards the future development of the cross-border e-commerce industry. They believe that although there is no need to consider restrictions on positive lists and product access during the buffer period, if no new policies are introduced after this, cross-border e-commerce platforms will inevitably fall into a development crisis. This year is more like a “death reprieve” for the entire cross-border e-commerce industry.
Although many practitioners are not optimistic about the development prospects of cross-border e-commerce, through the interpretation of the policy, we have come to a different point of view: the country still maintains an attitude of actively guiding and supporting the cross-border e-commerce industry.
The new tax reform policy is more aimed at making the industry healthier and more standardized. Although it has not achieved the expected results, it has also prevented the various players from suffering serious losses through timely adjustments. The one-year transition period is not only for cross-border e-commerce platforms to adjust, but also for the regulatory authorities to give themselves a buffer period to optimize regulatory policies.
The above conclusion is mainly due to the following three facts:
(1) Opinions of all parties
The document released by the General Administration of Customs only explains the relevant situation during the tax reform extension period, and does not point out to the outside world how to adjust after the suspension period. The opinions of all sectors of society are more inclined to the fact that the regulatory authorities will make more targeted adjustments based on the adjustment effects of this year and the development of the industry.
Usually, policy adjustments are related to multiple indicators. Such as whether the merchant operation is standardized, the scale of industry development, the impact on the development of the domestic retail industry, the scale of industry profits and taxes, etc. This also means that there is still a lot of room for future cross-border e-commerce policy adjustments, such as more open regulatory strategies and further optimization and adjustment of regulatory policies.
(2) Government measures and attitudes
After the new tax reform policy was implemented on April 8, 2016, the regulatory authorities expanded the positive list twice, and it is expected that the third adjustment document will be issued soon. This also shows that the regulatory authorities are actively refining and adjusting the new tax reform policy to better promote the further development of the cross-border e-commerce industry.
(3) The scale of cross-border e-commerce
According to statistics, the cross-border import commodity transaction volume in my country’s bonded areas was 16.7 billion yuan in 2015. It is expected that this figure will increase to 86 billion US dollars in 2017. With the continuous standardization of the cross-border e-commerce industry, the massive tax revenue it creates and the driving force for national consumption will surely prompt the regulatory authorities to more actively introduce relevant policies to promote its faster and better development and growth.
From these three aspects, the future development of cross-border e-commerce may be faster, and major cross-border e-commerce platforms may usher in new opportunities one year later. But there is no doubt that in the 40 days from the implementation of the new tax reform on April 8 to the issuance of a notice of extension of implementation on May 24, the development difficulties of the bonded area import model and the withdrawal of many capital giants all indicate that a new round of reshuffle is coming for the entire cross-border e-commerce industry.