China will launch favorable tax policies for the purchase of single items via cross-border e-commerce that are below 2,000 yuan ($307) and annual gross transactions valued at below 20,000 yuan, according to a statement posted on the website of the Ministry of Finance (MOF) on Thursday.
The new tax policy, which is temporary, will benefit buyers whose purchase values are under the official cap.
For deals below the cap, individual consumers who buy goods from cross-border e-commerce platforms will enjoy a 30 percent discount on import value-added tax (VAT) and excise duty. Customs tariffs will also be waived.
But if the purchased item is priced at over 2,000 yuan or the transaction is made after the 20,000 yuan annual cap is passed, the consumer will enjoy no tax discount.
The new tax policy on cross-border retail e-commerce, effective on April 8, was jointly drawn up by the MOF, the State Administration of Taxation and the General Administration of Customs.
Since late February, rumors had circulated on the Internet claiming that new tax policies will be applied to cross-border e-commerce from April 8.
China's cross-border e-commerce has been developing rapidly along with increases in consumers' incomes. Cross-border consumer e-commerce in China was about 259 billion yuan in 2015, accounting for more than 6 percent of China's overall consumer e-commerce, and the segment is growing by more than 50 percent every year, according to a report released by consultancy McKinsey & Co in February.
Meanwhile, increased demand for cross-border goods has not only helped e-commerce marketplace operators such as Alibaba Group Holding, JD.com Inc and Amazon.com Inc, but it has also spurred the development of illegal gray-market imports through channels such as daigou (overseas personal shoppers who buy and send goods to customers in China).
