Cross-Border E-Commerce Tax Policies Explained A Must-Read for Sellers

What Are the Cross-border E-commerce Tax Policies That Cross-border E-commerce Sellers Must Know?

With the acceleration of globalization and the development of Internet technology, cross-border e-commerce has become an important part of international trade. More and more enterprises and individuals are selling goods to all parts of the world through cross-border e-commerce platforms, which not only provides consumers with richer product choices but also brings new development opportunities for merchants. However, while enjoying the convenience brought by cross-border e-commerce, it is particularly important to understand and comply with relevant tax policies. This article will detail the tax policies of cross-border e-commerce and combine recent related news information to help cross-border e-commerce sellers better understand these policies.

First of all, we need to clarify that the tax policies of cross-border e-commerce mainly include tariffs, value-added tax VAT, and consumption tax, among others. For imported goods, when they enter the domestic market, they usually need to pay tariffs. The tariff rate varies depending on the type of goods and is generally determined according to the HS code of the goods. Starting from April 2025, China implemented new tax policies for retail imports of cross-border e-commerce. According to this policy, personal annual transactions up to RMB 26,000 can enjoy tax-free treatment; the excess amount needs to be paid according to VAT and consumption tax at a 70% discount.

Secondly, regarding the issue of VAT, according to the latest regulations, the VAT for retail imports of cross-border e-commerce goods is calculated based on 70% of the actual transaction price of the goods, i.e., the taxable value, and import VAT in the importation stage is exempted. This means that as long as the commodity price is within the limit, cross-border e-commerce sellers can avoid paying high VAT. However, once it exceeds the limit, tax payment needs to follow the normal process.

Furthermore, consumption tax is also an important component of the tax system in cross-border e-commerce. For certain specific categories of luxury goods or high-value consumer goods, such as jewelry, watches, etc., in addition to VAT, they also need to pay a certain percentage of consumption tax. The specific tax rate depends on the relevant documents issued by the State Administration of Taxation.

It is worth noting that in recent years, China has continuously strengthened its regulatory efforts on the cross-border e-commerce industry. For example, at the end of last year, the General Administration of Customs released a notice about adjusting the list of cross-border e-commerce retail import goods, further expanding the scope of the positive list and refining the negative list. This move aims to promote legal and compliant operations while combating smuggling and maintaining a fair competitive environment.

In order to cope with the increasingly complex international tax situation, countries are also actively promoting the construction of multilateral cooperation mechanisms. For instance, the two-pillar solution proposed by the Organization for Economic Cooperation and Development OECD is a significant measure aimed at reforming the allocation rules of corporate income tax in the context of the digital economy. Although this solution has not yet been fully implemented, it will have a profound impact on the future tax handling in the cross-border e-commerce field.

In summary, cross-border e-commerce sellers must always pay attention to the changing trends of domestic and foreign tax policies and adjust their business models in time to ensure compliance with legal requirements. Only in this way can they stand firm in the tide of globalization. At the same time, we hope that relevant departments can continue to optimize the existing system design and create a more relaxed and friendly business environment for enterprises. After all, a healthy and stable market ecosystem is the foundation for the common benefit of all participants.