China will start to levy new taxes on goods bought on cross-border e-commerce platforms beginning April 8th. Cross-border shopping has been a big business, but can it survive the new duties?

If you buy something from a cross-border web site now, you will pay a postage tax of about ten percent, and not even that if the tax comes to less than 50 yuan. Things are about to get very complicated.

The new tax will take effect April 8, and it will combine an import value-added tax with a consumption tax. And if a single transaction exceeds 2,000 yuan or an individual spends more than 20,000 yuan a year, customs will add a tariff onto the top of all that.

The cross-border web sites are going to see their costs rise substantially. Will they be able to survive? We asked one of the owners.

"Competition in the industry is going to get tougher. Now companies can make money just by stocking up on overseas goods, and selling them at a small profit. You can do that and still enjoy the tax exemption. But companies will find it hard to survive from now on. For example, in the past most of the paper diapers wound up coming in tax free, so they were very attractive for shoppers. But with the new policy, they will have to pay a 11.9 percent tax no matter what. So companies will have to negotiate with their suppliers to get a better prices," said Zhang Zhendong, founder and CEO of Bolome.

The new tax policy starting April 8 means the end of the tax free era for cross border e-commerce shopping. But is this really bad news for shoppers? Well, not necessarily.

It turns out there are some products that will actually be cheaper under the new rules. For example, the postage tax on make-up is 50 percent, but the new combination of taxes levied on this category will be much less than that. Mr Zhang from bolome says the change will make people less keen on buying paper diapers and milk powder, but more interested in looking overseas for quality products that can still be purchased more cheaply than at home. Customs, however, is going to have a harder time of it.

"For example, how can customs track different transactions and parcels and figure out whether they are from one person? Will they have to start tracking my ID or my passport," said Cui Lili, associate professor from Shanghai University of Finance and Economics.

The objective of the new customs rules is to establish fair competition between domestic retailers and cross border ecommerce platforms. Professor Cui also points out that if every transaction detail is tracked by customs, it will make delivery disputes easier to solve. Despite the complexity of the new procedures, the Ministry of Commerce forecasts cross-border e-commerce trade will reach 6.5 trillion yuan in 2016.

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