Shanghai Blog

Buying a watch from abroad

Online shopping of foreign goods across the border has been growing a lot in China, it even got a new name, usually called 海淘 (haitao) nowadays. Bit interesting that the e-commerce platform 淘宝 (taobao) has become so popular that 淘 just means buying in Chinese now. I anyway decided to buy a new watch from an European website. The watch isn’t expensive at all, around 60 EUR excl shipping. As its relatively cheap and a small package I was actually hoping it would just pass throw China customs without anyone bothering about it. That didn’t happen and what I really didn’t expect was just how troublesome the import process to China can be.
The logistics company the European watch company used (Kangaroo International) seemed to have outsourced its service in China to a very small Chinese logistics company. The Chinese logistics company didn’t speak English (so I spoke / wrote in Chinese to them) and they also couldn’t really clarify anything or provide information about the import rules. It all started with them calling me and telling me that I have a package stuck in China customs that needs to be declared. They then told me that the import tariff tax was 60% and sent me a bank account where I should pay it. Turns out this was wrong. I first asked the logistics company if this really was correct (as I thought it can’t possible be), but they then replied me quickly and said this is indeed correct, and I should pay 60% import tax plus their handling fee. My girlfriend continued by calling China Customs and asked about the rules. They said it should be 30% or less, but they couldn’t give a definite answer. Next step was to call the logistics company’s boss, after explaining the situation to him he said he would check with the employee handling my case. I then got an email saying that the China Customs had made a mistake but that it was now corrected to 30% import tax. They then asked me to pay 30% import tax but when I asked for a reference to the official rules and how this was determined they couldn’t provide any information at all.

It’s quite difficult to understand the China Customs rules. The last couple of years they also have a system called “cross border e-commerce”. In this model Chinese companies using “bonded warehouses” could avoid paying any import tax or VAT at all. Basically all those articles were classified as personal items and removed of tax up to a certain limit. From april 2016 they started charging a tax on this business, but it is still no import tariff and only a lower VAT rate. This whole business model seems quite strange to me and I’m wondering why these companies should have a much preferential treatment over private individuals.

So the section about “cross border e-commerce” doesn’t apply to a normal e-commerce order from abroad. In my case it got classified according to the parcel tax of China. This has also been updated recently. It used to be classified in 3 categories: 20%, 30% and 60% import tax. Now they have changed this to only two categories – 30% and 60% import tax. Luxury products will have a 60% import tax for example.

I found a good article that helped clarifying this at:
HKMB: Cross-Border E-Commerce: China Policy Update

Posted: 24 Sep 2016