China overhauls tax rules on imported goods sold online, making cosmetics cheaper for buyers
Foreign cosmetics brands among goods likely to be better value for shoppers after changes, says analysts
China is changing tax rules for imported goods that are sold online in a move that will see beauty products such as eye creams and moisturising gels from L’Oréal’s Lancome and Korea’s Amorepacific becoming cheaper for Chinese consumers.
The government will remove a special tax, or so-called parcel tax, that was previously levied on imports sold online. Instead, it will charge value-added and consumption duties that are currently imposed on most products sold in China, but with a 30 per cent discount, according to a Thursday statement posted on the website of the Ministry of Finance.
China slashes tax on foreign goods to help boost slowing economy
The move came after China broadened in January a pilot programme in which a port district in the eastern city of Hangzhou was allowed to trade imported goods at lower taxes.
As the world’s second-largest economy pushes its online retail industry and promotes the so-called “cross border e-commerce”, the country has expanded the programme to 13 cities.
China’s State Council approved the latest changes which will come into effect on April 8, according to the Thursday statement.
“Cosmetics will be the biggest beneficiary after the tax adjustment,“ said Catherine Tsang, a Hong Kong-based tax partner at PricewaterhouseCoopers.