China changes online import tax rules, a move to help cosmetics

The government will remove a special tax, or so-called parcel tax, that was previously levied on imports sold online. Instead, it will charge value-added and consumption duties that are currently imposed on most products sold in China but with a 30 percent discount, according to the Ministry of Finance.
The move came after China broadened in January a pilot program in which a port district in the eastern city of Hangzhou was allowed to trade imported goods at lower taxes. China’s State Council approved the latest changes which will come into effect on April 8, according to the Thursday statement.
Online sales of imported goods have grown at a compounded rate of 63 percent in the five years to 2015, reaching 638 billion yuan ($98 billion) and accounting for 17 percent of China’s total online retail sales, according to data from Mintel Group Ltd.
The most popular categories of products being purchased online in China are consumer electronics, clothing and shoes, appliances, food and beverage, and beauty products, according to research firm Euromonitor International.
Previous changes to promote cross-border e-commerce include:
* China started pilot program with a zone in Hangzhou in March 2015
* Trial expanded Jan. 2016 to Tianjin, Shanghai, Chongqing, Hefei, Zhengzhou, Guangzhou, Chengdu, Dalian, Ningbo, Qingdao, Shenzhen, Suzhou
* Parcel tax in zones set at 10% (food, infant items), 20% (electronics, apparel), 30% (high-end watches), 50% (cosmetics, alcohol)
* Tariffs waived for items that incur taxes below 50 yuan

(Bloomberg)