Quanguantong released "Imported Cosmetics Consumption Tax Policy and Cross-border E-commerce Tax Rate Application Tips"

Cosmetics have gradually become an indispensable daily necessity in people's lives. Since 2016, the state has abolished the consumption tax on ordinary beauty and decorative cosmetics, renamed the "cosmetics" tax item to "high-end cosmetics", and adjusted the tax rate to 15%. The All-Customs Information Network has collected and sorted out the specific contents of the relevant policies for everyone, and combined with the latest cross-border e-commerce channels The taxation and supervision regulations for imported cosmetics implemented on January 1, 2019 are used as examples.

I. Scope of tax collection: “high-end cosmetics”

Including high-end beauty, decorative cosmetics, high-end skin care cosmetics and complete sets of cosmetics. Specifically refers to beauty, decorative cosmetics and skin care cosmetics with a sales (duty-paid) price (excluding VAT) of 10 yuan/ml (g) or 15 yuan/piece (sheet) or above in the production (import) stage. From October 1, 2016, the consumption tax rate for cosmetics import will be reduced from 30% to 15%.

2. Announcement No. 55 of the General Administration of Customs of 2016 specifies the specific requirements for customs supervision and taxation

(1) The first legal unit of measurement for cosmetics is “kilogram” and the second legal unit of measurement is “piece”.

(ii) For cosmetics whose packaging indicates content by weight, the first statutory quantity shall be reported based on the net content, i.e., excluding the weight of the inner and outer packaging materials; the second statutory quantity shall be reported based on the number of independently packaged bottles (cans).

(III) For cosmetics whose packaging indicates content by volume, the first legal quantity shall be declared according to the conversion relationship of 1 liter = 1 kilogram of net content, i.e., the volume of the inner and outer packaging materials shall not be included; the second legal quantity shall be declared according to the number of bottles (cans) with independent packaging.

(IV) For cosmetics with packaging marked as “pieces” or “sheets”, the first legal quantity shall be declared according to the net weight of the goods; the second legal quantity shall be declared according to the number of “pieces” or “sheets”.

III. Key points on taxation and supervision of cosmetics imported through cross-border e-commerce retail channels

(I) From January 1, 2019, the limit on a single transaction for an individual will be increased from RMB 2,000 to RMB 5,000, and the limit on an annual transaction for an individual will be increased from RMB 20,000 to RMB 26,000. For cross-border e-commerce retail imported goods within the limit, the tariff rate is temporarily set at 0%; the value-added tax and consumption tax at the import stage will be levied at 70% of the statutory tax payable.

(II) When the duty-paid price exceeds the single transaction limit of RMB 5,000 but is lower than the annual transaction limit of RMB 26,000, and there is only one item under the order, it can be imported from the cross-border e-commerce retail channel. Customs duties and import value-added tax and consumption tax will be levied in full according to the goods tax rate, and the transaction amount will be included in the annual transaction total. However, if the annual transaction total exceeds the annual transaction limit, the cross-border e-commerce policy will no longer apply and the import procedures should be handled as general trade.

(III) Example: 1. A set of cosmetics worth RMB 3,000 is imported through a cross-border e-commerce retail channel with a tariff of 0. It is taxed at a VAT rate of 11.2% and a consumption tax rate of 10.5%.

2. A single piece of cosmetics that exceeds RMB 5,000 but does not exceed the individual's annual cumulative transaction limit can be imported through cross-border e-commerce retail channels, but customs duties, value-added tax and consumption tax will be levied in full and will be deducted from the corresponding individual's annual cross-border e-commerce retail transaction amount.

3. If the transaction value exceeds the individual's annual cumulative transaction limit, the import declaration procedures shall be carried out in accordance with general trade goods.