State Council’s Decision on Continuing and Improving the Existing Policies on Cross-Border E-Commerce Retail Imports

At its executive meeting held on 21 November, the State Council decided to continue and improve the existing policies on cross-border e-commerce retail imports. On 29 November, the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation issued the Notice on Improving the Tax Policies on Cross-border E-commerce Retail Imports (Cai Guan Shui No.49 [2018]), which includes the following:   

1. Starting from 1 January 2019, the current policies regulating cross-border e-commerce retail imports will continue. First-time cross-border e-commerce retail imports will not be subject to licensing, registration or filing requirements and will instead be regulated as imports for personal use.
2. The scope of the existing policies will be extended from the current 15 cities such as Hangzhou to another 22 cities, including Beijing, Shengyang, Nanjing, Wuhan, Xi’an and Xiamen, where new comprehensive cross-border e-commerce pilot zones have just been established, whereas direct import businesses in non-pilot cities can operate in accordance with the relevant regulatory policies.
3. Commodities included in the cross-border e-commerce retail imports list that enjoy zero tariffs within a set quota and have their import value-added tax and consumer tax collected at 70 percent of the statutory taxable amount will cover another 63 tax categories of high-demand commodities. The quota of commodities eligible for such preferential policies will be raised from 2,000 yuan to 5,000 yuan per transaction, and from 20,000 yuan to 26,000 yuan per head per year, which will be further adjusted as personal incomes increase.     
4. Imported commodities purchased through e-commerce platforms shall be regarded as final commodities for personal use by end consumers and cannot be re-sold in the domestic market. In principle, the "bonded online purchase + offline self-sufficiency" model for import of bonded commodities purchased online is prohibited outside special customs supervision areas.

 

Announcement of 13 Ministries and Commissions on Revising the List of Cross-border E-Commerce Retail Imports (No. 157 [2018])

On 20 November 2018, the Ministry of Finance, the National Development and Reform Commission,  the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, the People's Bank of China, the General Administration of Customs, the State Administration of Taxation, the State Administration for Market Regulation, the National Medical Products Administration, the State Cryptography Administration and the State Office for Endangered Species jointly published the Announcement on Revising the List of Cross-border E-commerce Retail Imports  (No. 157 [2018]).

The List of Cross-border E-commerce Retail Imports (2018 Version) covers 1321 types of products and will take effect from 1 January 2019. Upon implementation of the new list, the previous lists included in the Announcement of 11 Ministers and Commissions including the Ministry of Finance on Issuing the List of Cross-border E-commerce Retail Imports (No.40 [2016] ) and the Announcement of 13 Ministries and Commissions including the Ministry of Finance on Issuing the List of Cross-border E-commerce Retail Imports (Second Group) (No.47 [2016] ) will be abolished. 

 

Notice on Revising the Relevant Catalogues of Tax Policies on Import of Major Technology Equipment（Cai Guan Shui【2018】No.42）

On 14 November 2018, the Ministry of Finance, the Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the General Administration of Taxation and the National Energy Administration decided to revise the relevant catalogues of tax policies on import of major technology equipment, which includes the following：

From 1 January 2019, qualified domestic producers are exempted from customs duty and import value-added tax for import of key components and raw materials for those major technology equipment and products included in the revised catalogues. 

From 1 January 2019, the relevant enterprises that have obtained approval to enjoy preferential import tax treatment shall be taxed accordingly for import of non-exempt major technology equipment and products included in the revised catalogues, as well as for those technologies, accessories and spare parts imported alongside the above-mentioned equipment in accordance with the relevant contracts. 

 

Implementation of Network Verification of Seven Regulatory Certificates and Documents Including the Customs Clearance Form for Drug Imports (Announcement No.148 [2018] of the General Administration of Customs and the National Medical Products Administration)

From 29 October 2018, the General Administration of Customs and the National Medical Products Administration implemented nationwide network verification of the electronic data of import and export licenses for narcotic and psychotropic drugs, recordation/registration certificates for import of medical devices, health permits for import of special-purpose cosmetics and health permits for import of non-special-purpose cosmetics against the electronic data of customs clearance forms for import and export of goods.

Drugs authorities issue the above-mentioned certificates and documents in accordance with the relevant laws and regulations, then pass their electronic data on to customs, which carries out cross checks during customs clearance procedures and goes through import and export formalities in accordance with the regulations. For certificates and documents issued before the implementation of network verification, enterprises can present their hard copies to customs for import and export declaration within their validity period. 

Since 1 November 2018, all 46 types of regulatory certificates and documents are subject to nationwide network verification, except under special circumstances such as those relating to confidentiality. Enterprises can declare such certificates and documents through paperless means to save time, paper and effort.

 

Announcement on Publishing Certain Classification Decisions for Commodities（Announcement No. 159 [2018] of the General Administration of Customs ）

For the purpose of implementing the Convention on the Harmonized Commodity Description and Coding System of the World Customs Organization (WCO) , the General Administration of Customs published classification opinions on 77 commodities including two-wheeled self-balancing scooters and selfie sticks on 2 November 2018, which are implemented as classification decisions by the Chinese customs since 1 December 2018.

 

Announcement on Matters related to Launching the Information Management System for Postal Articles Entering or Leaving China (Announcement No.164 [2018] of the General Administration of Customs)

From 30 November 2018, the General Administration of Customs and China Postal Group realized nationwide head office-to-head office network transmission of data for mail entering or leaving China. Postal service providers shall be responsible for collecting the electronic data of mail forms and passing it on to the customs office’s information system. Information on mail forms shall include the names of the recipient and the sender, the recipient country (region) and detailed address, as well as the names, quantity, weight and price (including currency) of the contents.

Customs authorities shall inform postal service providers of the results of mail processing through its information system. Postal service providers shall deliver mail in accordance with the customs office’s feedback.

Postal service providers shall pass the relevant electronic data such as that of general mail packages on to the customs office when undergoing formalities for the entry, exit and transfer of general mail packages.

 

Announcement on Expanding the Scope of the Market Procurement Trade Pilot Program (Announcement No. 167 [2018] of the General Administration of Customs)

On 13 November 2018, the General Administration of Customs issued the Announcement on Expanding the  Scope of the Market Procurement Trade Pilot Program (Announcement No. 167 [2018] of the General Administration of Customs) to expend the scope of customs supervision "market procurement" (code: 1039) to cover six markets, namely Wenzhou (Lucheng) Light Industrial Products Trade Center, Quanzhou Stone Lion Garment City, Hunan Gaoqiao Market, Asian International Furniture and Materials Trade Center, Zhongshan Lihe Lamp Exhibition Center and Chengdu International Trade Market. The specific implementation timelines will be issued separately by individual customs offices in Hangzhou, Xiamen, Changsha, Guangzhou, Gongbei and Chengdu. 

 

Announcement on Comprehensively Promoting the Customs Special-Purpose Bill of Payment Printing Reform（Announcement No. 169 [2018] of the General Administration of Customs）

In order to further optimize the business environment at customs control points and facilitate customs clearance for enterprises, the General Administration of Customs decided to comprehensively promote the reform of printing for the Customs Special-purpose Bill of Payment and encourage enterprises to take charge of its printing from 19 November 2018.

After completing the payment of taxes through digital means, import and export enterprises and entities can download the electronic Customs Special-purpose Bill of Payment from the “internet + customs” integrated online platform (http://online.customs.gov.cn) or the International Trade  “Single Window” Standard (https://www.singlewindow.cn), or make an application to customs on site for printing a hard copy of the Customs Special-purpose Bill of Payment.

 

Announcement on Shortening the Examination and Approval Period for Health Permits at the Country Border (Announcement No. 173 [2018] of the General Administration of Customs)  

In accordance with the requirements of the State Council’s Notice on Promoting the “Separation of Business Permits and Licenses” Nationwide (State Council [2018] No.25), the General Administration of Customs decided to shorten the examination and approval period for the “issuance of border health permits” to 13 working days starting from 1 January 2019. Customs offices shall make an administrative decision within 13 days after acceptance of applications whether to grant the border health permit.

 

Announcement on Issuing the Standards for the Customs’ Certification of Enterprises (Announcement No. 177 [2018] of General Administration of Customs）

On 22 November 2018, the General Administration of Customs issued the Standards for the Customs’ Certification of Enterprises (the Standards), which are to be implemented alongside the Customs’ Measures for Enterprise Credit Management (Decree No.237 of the General Administration of Customs).

The Standards include general standards and Individual standards on consignees and consigners of import and export goods, customs declaration enterprises and comprehensive foreign trade service enterprises. The standards for advanced certified enterprises have been revised from five categories, 18 articles and 32 criteria to four categories, 17 articles and 31 criteria, whereas the standards for generally certified enterprises have been revised from five categories, 18 articles and 29 criteria to four categories 17 articles and 29 criteria.

Compared with the previous standards, the revised standards have incorporated commodity inspection requirements,  financial rigidity indicators and information system requirements.

The Announcement will take effect from 1 January 2019.

 

Announcement on Matters related to the Implementation of the Measures of the Customs of the People’s Republic of China for Enterprise Credit Management (Announcement No. 178 [2018] of the General Administration of Customs) 

On 27 November 2018, the General Administration of Customs issued the Announcement on Matters related to the Implementation of the Measures of the Customs of the People’s Republic of China for Enterprise Credit Management, which includes the following:

Enterprises that are held criminally responsible for breaches of border health quarantine regulations, animal and plant import and export quarantine regulations, food and cosmetics import and export safety regulations and commodity import and export inspection regulations shall be deemed discredited by customs. Enterprises indicted on suspicion of breaches of border health quarantine regulations, animal and plant import and export quarantine regulations, food and cosmetics import and export safety regulations and commodity import and export inspection regulations during their application for customs certification shall be disqualified by customs.

Administrative measures that impose an inspection and quarantine spot check ratio of 80% or above shall apply to enterprises deemed discredited.

Certified enterprises indicted on suspicion of breaches of border health quarantine regulations, animal and plant import and export quarantine regulations, food and cosmetics import and export safety regulations and commodity import and export inspection regulations shall be suspended from the relevant applicable administrative measures.

Where enterprises voluntarily disclose breaches and receive a warning or a fine of less than 500,000 yuan by customs, their certification records shall not be affected.

Announcement of Hangzhou Customs on A Number of Innovative Measures to Support the Development of Zhejiang Free Trade Zone

Hangzhou customs announced a number of innovative measures to support the development of Zhejiang Free Trade Zone, which include supporting the construction of “Single Window" for international trade, unified declaration procedures and paperless customs clearance for ships on international voyages. Hangzhou customs has also rolled out 12 measures, including “cross-regional direct supply", “single vessel, multiple supplies“, "blending of bonded oil products with the same product code", "blending of bonded oil products with different HS codes“, “clearance upon declaration" for import of oil products under Green Petrochemical Projects, with a view to facilitating investment trade across the entire industry chain of oil products and advancing the development of bonded fuel oil business.

Northen China 
Eric Zhou
China Trade and Customs Services
Lead Partner
Email:  ec.zhou@kpmg.com
Tel: +86 (10) 8508 7610

Helen Han  
Partner 
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Eastern and Western China
Anthony Chau 
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Emai:anthony.chau@kpmg.com
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Dong Cheng
Partner
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Rachel Tao
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Southern China
Grace Luo
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Vivian Chen
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Tel: +86 (755) 2547 1198

Phillip Xia
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Hong Kong
Daniel Hui  
Partner
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Tel: +852 2522 7815