Skip to main content

Site Navigation

Site Search

global Tax

An Introduction of Cross Border E-commerce (CBEC)

January 13, 2017

Established in 2014, CBEC is a special import channel which allows products to be sold directly online to consumers (B2C).

Rather than set up a physical entity in China, sellers can enter a Chinese cross-border e-commerce platform and ship directly from overseas or fulfill orders through a bonded warehouse located in a special Chinese e-commerce pilot zone. The channel has temporary exemptions to tariffs and other regulatory requirements which apply to conventional international trade (B2B).

2016 changes of CBEC:

Tax treatment: A flat tax of 11.9% is applied to the final online retail price at the time of purchase (calculated as a 30% discount on VAT). A discounted rate of consumption tax also applies to luxury goods (14%), cosmetics (14%) and wine (21%). For the individual consumers, they are permitted to buy up to USD 295.00 worth of such goods per order, up to a limit of USD 2946.00 per year.

A ‘Positive List’ of products: The list includes eight categories of products (accounting for 1,293 different tariff lines) and covers food and beverages, clothing, footwear, hats, home appliances, cosmetics, diapers, children’s toys and a host of other items commonly purchased by Chinese consumers on e-commerce platforms.

Extension: There is also a one-year grace period for implementation of the new e-commerce rules. It specifically provides that, until May 11, 2017, in the 10 cross-border e-commerce pilot cities, the supervision of cross-border e-commerce will follow existing requirements and not the new cross-border e-commerce rules.

Since China’s cross border e-commerce sector is still at an early stage of development, these changeable policies should be noted by foreign companies planning their entry strategy into China’s e-commerce industry.

Stay tuned for more on the state of China’s economy and tips for Doing Business in China. Contact our Global Tax Services Team for more information.

Stay informed. Get all the latest news delivered straight to your inbox.

Also in Tax Blog

up arrow Scroll to Top