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What is the tax policy of goods imported into China via CBEC?

CBEC products are considered personal goods and thus are subject to preferential tax. The taxes levied and the rate depends on whether the value of the purchase is within the RMB 5,000 limit for a single transaction and the RMB 26,000 annual limit quota for each person:

  • Within the RMB 5,000 limit for single transactions: Imported CBEC products are exempted from customs duties, while VAT and consumption tax (if applicable) is charged at 70%:

CBEC Comprehensive Tax Rate= {(VAT Rate + Consumption Tax Rate) / (1 – Consumption Tax Rate)} * 70%

  • Exceeding the RMB 5,000 limit for single transactions: For transactions of one indivisible piece of merchandise with a value exceeding the RMB 5,000 limit, CBEC import is still allowed, however customs duties, VAT and consumption tax (if applicable) will be charged in full, and the value will be added into individual annual quota (RMB 26,000). In this case, therefore, the only benefit of the CBEC model relates to easier customs clearance.

If, however, the individual annual quota has been exceeded, CBEC import is not allowed; goods must be bought via the general trade channel (i.e. physical stores, traditional e-commerce, etc.).

More details on the preferential tax policy for CBEC imported goods, with concrete examples, are available on dedicated resources produced by the EU SME Centre.