Recently, Zhejiang Provincial Government released the “Implementation Plan for China (Hangzhou) Cross Border E-commerce Comprehensive Pilot Zone”, which includes significant innovative measures to increase growth in this sector.
Major advantages of Hangzhou Comprehensive Pilot Zone:
Hangzhou Comprehensive Pilot Zone will mainly focus on the implementation of pilot programs to assess the feasibility of new technical standards, business processes, regulatory models and information technology construction for cross-border e-commerce transactions, payment, logistics, customs clearance, tax refund, foreign exchange settlement and other links.
“Six systems” including information sharing service system, financial service system, intellectual logistics system, e-commerce trader credit system, risk prevention system, and statistical inspection system will be established in Hangzhou Comprehensive Pilot Zone. An online “single window platform” that integrates the process of goods declaration, inspection and release will be combined with the offline “comprehensive zone” platform to facilitate information exchange between different governmental departments, and increase the efficiency of customs clearance.
Tax exemption policy for cross border e-commerce
According to the current taxation policy, tax refunds can be obtained by providing a special VAT invoice or by obtaining a legal goods importation vouchers for cross border e-commerce. Products will be taxed at the same rate as domestically produced goods if the criteria for these tax exemptions are not met.
In Hangzhou if a domestic importer has not obtained the relevant goods importation voucher, but records information including the name of the seller, tax payer identification number, selling date, name of goods, quantity, unit price, total amount, etc. in the “single window” platform before Dec 2016 they can also benefit from VAT exemptions.
Cross border e-commerce: Negative list
“Negative list system” has been implemented for cross border e-commerce to monitor specific categories of goods that from a regulatory aspect are difficult to categorize. Enterprises engaged in cross border e-commerce can now import all commodities not listed in the negative.
Foreign exchange payment policy will be loosened
Currently, the total amount of personal annual foreign exchange settlement in China is USD 50,000. Privately owned businesses or individuals included in the Comprehensive Pilot Zone will not be restricted by the 50,000$ limit in the future.
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