U.S. De Minimis Raised. China to Follow Suit.

Apr 26 2016

In the first half of 2015 ecommerce accounted for over $253 bn - around 10% of China’s total consumer retail sales*, and 20% of the population had purchased via mobile.**


“China is ahead of the world already in so many aspects of ecommerce, particularly in the way the market has embraced online shopping across different devices. This is why it’s so exciting that they have modernized their financial regulations and made it easier for retailers around the world to do business in China. The potential benefit for ecommerce retailers is huge” Brian Bourke, VP Marketing


The Trade Facilitation and Trade Enforcement Act of 2015 is now in full effect, increasing the US de minimis rate from $200 to $800, which has major implications for those who import goods into the US. Following the passing of this bill, China has implemented similar changes of their own.


What is the “de minimis”?


Goods that are imported into the US are subject to duties, taxes, and other formal customs procedures if the value of those goods is over a certain threshold. That threshold, the de minimis, has been set to expedite the customs process for low value shipments, previously a sum of $200. With the new bill being passed, that rate has now been extended to imported goods that are valued at up to $800.


This will have a noticeable effect for ecommerce vendors of all varieties. Customers and logistics providers can expect faster delivery times and returns processes, as well as cheaper delivery costs, all thanks to the Trade Facilitation and Enforcement Act.


How China has Changed?


China has now also done their part in the facilitation of easier trade, with the Ministry of Finance doubling their limits from CNY 1000 on personal imports to CNY 2000. In the same way the US will have a more relaxed customs process on its imports, goods coming in to China that fall below the CNY 2000 threshold will be exempt from import duty, subject to 70% of the applicable VAT rate, and subject to 70% of the applicable Consumption Tax rate. Additionally, the annual limit for an individual will be CNY 20,000. The duty and tax application will depend on the type of import.


This change in the Chinese importing system will not only be for retailers and other businesses. Goods sent to private individuals in China by private individuals abroad, and goods brought into China by travellers will be subject to the new change in the value threshold as well. The current limit of CNY 1,000 per private import will increase to CNY 2,000.