Ben Cavender
Ben Cavender

China has slapped tax on cross-border e-commerce, a trade that went previously under the tax radar. Especially the smaller operations could be hurt, tells retail analyst Ben Cavender the China Daily, while the larger ones can avoid damage.

The China Daily:

According to the new rules, retail goods purchased online from outside of China will no longer be treated as personal postal articles but imported goods, which are subjected to tariffs,import VAT and consumption tax.

In addition, any single transaction exceeding 2,000 yuan, or an individual who spends more than 20,000 yuan a year, will be charged the full tax for general trade on top of that.

Ben Cavender, principal of China Market Research Group, believes that online platforms that have hit critical mass in user numbers will still do well.

However, he noted that they now have to contend with the fact that it will be difficult to attract more users as the products sold on cross-border e-commerce platforms are no longer significantly cheaper than those in physical stores.

More in the China Daily.

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