Chinese Premier Li Keqiang announced that the government will lower value-added tax rates for certain industries. The announcement was made during the annual National People’s Congress.
According to a press release, PRC will lower its value-added tax (VAT) rates as part of an RMB 2 trillion (US$298.3 billion) cost cut package, as the government seeks to reduce costs for businesses amid a slowing economy and tariff dispute with the US.
According to Li, China’s VAT rates will change as follows. The 16% VAT rate, which applies to the manufacturing sector, will be lowered to 13%; the 10% rate, which applies to construction and transport, will be lowered to 9%; and the 6% rate, which applies to services, will remain the same, but more deductions for the bracket will be introduced.
Launched in 2015, NetEase’s Kaola is the largest cross-border import retail e-commerce platform in China with a 26% market share in 2018.
As the result of the VAT cut, China’s cross-border e-commerce consolidated tax will be lowered from 11.2% and 25.53% to 9.1% (grocery, baby supplies, nutrition, personal care) and 23.05% (high-end skin care, cosmetics, perfume), respectively.
In addition to lowering VAT rates, Li said that tax authorities will continue to explore the possibility of further streamlining the VAT system by reducing the number of VAT brackets from three to two. China also reduced its VAT rates last year as part of a similar tax cut package.
China is going to take a giant leap towards cross-border e-commerce due to new regulations.
Thanks to cross-border e-commerce in China, Chinese products entered directly into foreign homes. What was only found in the Dragon or vice versa is now available to anyone changing the way we perceive commerce and purchasing. Cross-border e-commerce is becoming every day more important worldwide, especially in the PRC where it reached 60 million people in 2017.
©Alessio Lin, Hangzhou West Lake. Also knowed “Chinese e-commerce capital”, Hangzhou is now an innovative hi-tech hub.
And today, China is going to take a giant leap towards cross-border e-commerce due to new regulations. Last November, the government raised the ceiling on individual cross-border e-commerce purchases.
Single transaction limits were raised from 2,000 RMB to 5,000 RMB per person, and annual transaction limits were raised from 20,000 RMB to 25,000 RMB per person. In Jenuary, State Counsil already put in act its first-ever e-commerce law. The new legislation was a positive development in the country’s long-lasting fight against counterfeit products and intellectual property violations, said lawyers.
And now Chinese cross-border e-commerce is linking Chinese market with Western one: China -Wallonia new cargo train is an example.
China, Belgium set model for China-EU cooperation. Beijing is ready with Brussels to strengthen the cooperation between two countries and exchanges at all levels. The China-Europe freight train for cross-border e-commerce finally departed from Zhengzhou, capital of Central China’s Henan province, March 2, 2019. The train, named “Cainiao”, left Zhengzhou for Liege of Belgium at the beggining of March.
The new route was officially launched last year during the occasion of the celebration of the 30th anniversary of the twinning between the Walloon Region and Henan Province and it’s a clear example about how cross-border e-commerce could connect markets.
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