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China has announced drastic changes to the way purchases from foreign ecommerce sites will be taxed, with the changes due to come into effect in April.
Import duties will be scrapped for all goods bought from foreign websites, up to a value of 2,000 yuan.
However, in its place, a sales tax of 11.9% will apply.
This will benefit companies that sell items that are currently subject to higher sales taxes, such as clothing, electronics, alcohol and cosmetics.
However, it will be bad news for companies that sell items that are currently subject to lower taxes, such as food and children’s items.
The new rules will apply to foreign companies that sell items from their own sites, as well as foreign companies that sell their items on Chinese online marketplaces such as Alibaba, JD and Amazon China.
The Chinese ecommerce market totalled 589 billion US dollars last year.