On 24 March 2016, the State Administration of Taxation, the Ministry of Finance and the General Administration of Customs jointly issued the Circular of Taxation on the Tax Policy for Cross-border E-commerce Retail Imports (Cai Guan Shui  No. 18) (“Circular”), effective from 8 April 2016. The Circular aims to promote the development of imported goods via cross-border e-commerce, in a fair and competitive market.
According to the Circular, individuals purchasing imported goods via cross-border e-commerce are tax payers, the actual transaction price is the dutiable price, and e-commerce corporations, corporations specialized in e-commerce transactions, platforms and logistic enterprises are withholding agents and responsible for deducting taxes. Further, the Circular specifies that imported goods via cross-border e-commerce have a transaction limit of CNY 2,000 for each transaction, and a maximum of CNY 20,000 per person per year. The tariff for any commodities imported within the foregoing transaction limits are temporarily fixed at 0%, and the exemption for import VAT and consumption tax are cancelled and temporarily levied at 70% of the statutory tax. If imported goods via cross-border e-commerce are returned within 30 days from the date of customs clearance, a tax refund can be claimed and the individual transaction limit will be adjusted accordingly.
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