China implements a new tax system for cross-border e-commerce retail sales on Friday.
The policy will offer cross-border business as well as traditional retailers a fairer competition mechanism.
In the new system, retail goods purchased online will no longer be classified as “parcels”, which enjoy a “parcel tax” rate, lower than that on other imported goods.
Instead, online purchases from overseas will be charged in the same way as any other imported goods.
Previously, China levies parcel tax on imported goods worth less than 1,000 yuan, about 150 U.S. dollars, and the rates is mostly 10 percent. Taxes under 50 yuan, about 7.7 dollars are waived.
As demand for overseas goods grows, online purchasing agents have taken advantage of parcel tax and used new methods such as repackaging and mailing products separately to avoid tax.
The new policy only allows a maximum of 2,000 yuan, about 300 dollars per single cross-border transaction and a maximum of 20,000 yuan, about 3,000 dollars per person per year.
Goods exceeding these limits will be levied the full tax for general trade.
The new policy will speed up customs clearance so consumers will receive most orders from overseas within two weeks, instead of the current two months.