The impact and countermeasures of new tax policy for cross-border e-commerce in China

Abstract

The implementation of the Announcement on Issues concerning the Regulation of Retail Import and Export Commodities through Cross-Border E-commerce marked the end of a tax-free era of cross-border e-commerce in China. The new policies (known in this paper as the New Deal) have had a profound effect on enterprises, consumers and overseas purchasing agents engaged in cross-border e-commerce transactions. Empirical data from eight cross-border e-commerce pilot cities (Shanghai, Chongqing, Guangzhou, Shenzhen, Zhengzhou, Ningbo, Hangzhou and Dongguan) were studied. Results from the research into these pilot cities show that: (1) the development of cross-border e-commerce among those cities is unbalanced; (2) the New Deal has not resulted in a significant impact on import and export behaviours; and (3) the tax burden of cross-border e-commerce enterprises has increased considerably since the implementation of the New Deal. Based on these results, for the purpose of promoting the development of cross-border e-commerce, the following recommendations are made: (1) improve the policies and regulations to create an environment that supports e-commerce development; (2) facilitate the port cooperation mechanism and promote the construction of a customs single window; (3) strengthen top-level design and improve the coordination and management between relevant authorities; and (4) encourage enterprises to follow market trends and focus on product innovation and market expansion.