Some Useful Information for Exporting into China PART 1

Some Useful Information for Exporting into China PART 1

It would be assumed that most Australian manufacturers who export their goods to China are aware of the newly introduced law of the “People’s Republic of China Electronic Commerce Law” that was established after the New Year, also referred to as the “new e-commerce law”. Some have described this as pouring fuel into an already chaotic fire that is the Australian-exporting-to-China market, as China is a country with immeasurable needs for its consumption as an enormously populated country. However, the Chinese market is indeed Interesting. It has space and needs but it can also be out of reach and challenging to control. In addition to this with a variety of newly introduced policies and regulations, there is no doubt that most Australian manufacturers are most likely left feeling a little confused and puzzled ?

So, who is this new e-commerce law really targeted at? Will this affect and change the market demand? How should Australian companies adapt so as to expand into the chinese market? As a logistics company who originated in China, Australia Profit Fields Logistics Pty Ltd can provide you with some very important first-hand informational feedback.

First and foremost, as an e-commerce company, you must be legally registered and pay all kinds of tax payable. Some individuals in China Daigou may have committed tax evasion by exploiting the hidden online features of WeChat. For example, when a Chinese consumer pays $1000 rmb = ($ 208 AU) for a bottle of skin care product online through an e-commerce business, The consumer must also pay approximately $500 rmb = ($104 AU) worth of tax. The taxes and fees that import companies need to pay through general trade imports include import duty + added value tax + Consumption tax etc. These can vary depending on product. Therefore the overall tax rate is approx 50%, and the tax rate will vary according to the category of the product. If so, then how much is the purchase cost? It is no secret to everyone that the standard direct - post - parcel has very strict rules on packaging, for instance a package cannot exceed 6 products. This means that the parcel’s value will be reduced below the customs standard for personal parcel tax collection, therefore creating an opportunity for the behaviour of tax evasion, whilst affecting the purchase cost as it becomes only the sum of purchase price + international logistics without the taxes for Chinese Daigou . Inevitably this will result in a lower purchase cost compared to those companies that rent offices, hire employees and pay taxes on time.

Therefore, the new e-commerce law requires all e-commerce trades, including individual trades and those who trade through the platform of WeChat must now be registered to pay tax.

Secondly, what we are now seeing is Consistent Chinese recipients who receive goods constantly throughout the year are now being investigated by relevant departments? As of current, Chinese customs related website (http://ceb2pub.chinaport.gov.cn/limit/outIndex) stated that Individual users can enter relevant personal information online to inquire about the goods imported through all Chinese ports. Some companies are exploiting this by committing identity theft in order to conduct imports whilst evading taxes by using other peoples identification. The Chinese Customs stipulates that the annual import quota of any individual for personal use parcels is $26,000 rmb ($5430 AU) Some Chinese recipients may never have bought any products abroad, but the import quota has been stolen by others regardless. Therefore, after the new e-commerce law was introduced, stolen ID cards, ID cards with a history of repeated imported bulk goods, or a large number of similar goods will now be strictly investigated.