March 2023

Joyce Wen and Teresa Huang

On January 30, 2023, the Ministry of Finance, the General Administration of Customs and the State Taxation Administration jointly issued the Announcement on Tax Policy for Goods Returned from Cross-border E-commerce Export (hereinafter referred to as the “Announcement”).

The Announcement lowers the threshold for goods returned from cross-border e-commerce export being exempted from import tariffs and reduces the cross-border e-commerce enterprises’ costs for returned goods.

The Announcement provides that the goods (excluding food) declared for export under the cross-border e-commerce customs supervision code (1210, 9610, 9710, 9810) within one year from the date of the publication of the Announcement, which are returned to China in their original state within six months from the date of export due to unsalable and return reasons, can be returned to China with “zero tariff”.

The Announcement specifies the tax certification procedures to be performed by the enterprises.  For goods that meet the provisions of Article 1 of the Announcement, if the export tax refund has been handled, the enterprise shall pay the refunded tax.  An enterprise who should apply for tax refund shall apply for refund of export tariff on the basis of the Certificate of Tax Paid/Refunded for Exported Goods.

The Announcement also clarifies the concept of “returned to China in their original state”.  The concept of “returned to China in their original state” means that the minimum form of export goods when returned to China shall be basically the same as that of the original export, and no accessories or parts shall be added, and no processing or modification shall be carried out, but it can still be regarded as “in their original state” after unpacking, inspection (laboratory test), installation and commissioning; the returned and imported goods shall not be used, except for the cases where the quality is found to be poor only after trial or can be proved to be returned after trial by the customer.

We hereby draw the attention of all relevant enterprises to enjoy the tax benefits in strict accordance with the policy to avoid tax evasion, tax fraud and other illegal and irregular acts.

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