Goods tax and parcel tax
Taxes on imports consist of a commodity tax and a personal postal articles tax. As the names imply, the commodity tax is charged on imported goods, and the personal postal articles tax is charged on personal items including items in baggage and parcels.
Tariffs, value-added tax, consumption tax and personal postal articles tax
There are three types of commodity taxes in the import chain: tariffs, value-added tax, and consumption tax. The personal postal articles tax is a comprehensive tax. Imported goods are subject to tariffs and import value-added tax; some (such as vehicles, liquor and gasoline) are also subject to consumption tax. When tax on imported personal items exceed the tax credits, they only need to pay the personal postal articles tax.
Imported laptops are subject to tariff and import value-added tax. Among them, the Most-Favored-Nation (MFN) tariff is zero, and in those cases only the 17 percent value-added tax is needed.
The taxes on imported vehicles include tariff, import value-added tax and consumption tax. The value-added tax is 17 percent and the tariff for most vehicles is 25 percent. The consumption tax depends on the engine displacement of a vehicle: 1 percent for engine displacement below 1 liter, 3 percent for engine displacement between 1 liter and 1.5 liters, 5 percent for engine displacement between 1.5 liters and 2 liters, 9 percent for engine displacement between 2 liters and 2.5 liters, 12 percent for engine displacement between 2.5 liters and 3 liters, 25 percent for engine displacement between 3 liters and 4 liters and 40 percent for engine displacement above 4 liters.
1. Tariff = dutiable value (price of goods determined by Customs) × import tariff rate
a. The currency of import tax payment is RMB. If the imported goods are valued in foreign currency, the Customs shall calculate the RMB according to the intermediate price of the RMB exchange rate announced by the State Administration of Foreign Exchange on the date of issuance of the tax payment certificate. Foreign currencies not included in the RMB exchange rate list should be converted into RMB according to the exchange rate determined by the State Administration of Foreign Exchange.
b. The amount of the dutiable value is calculated to the single digit, with standard rounding to the nearest yuan. The tax payable is calculated to the cent, with standard rounding to the nearest cent.
c. The tariff on one lot shipment under 50 yuan ($7.23) should be considered tax-free. The transaction prices of imported goods have different price forms due to different trading conditions. The common price terms include FOB, CFR and CIF.
2. Import value-added tax = (dutiable value + tariff+ consumption tax) × 17 percent
China's value-added taxable goods are all levied on an ad valorem basis, and the basic tax rate is 17 percent. However, for some important materials related to the national economy and people's livelihoods, the value-added tax rate is 13 percent: 1. grain, edible vegetable oil 2. tap water, heating, cold air, hot water, gas, petroleum liquefied gas, natural gas, biogas, coal products for residents; 3. books, newspapers, magazines; 4. fodder, fertilizer, pesticide, agricultural machinery, agricultural film; 5. metal ore and non-metallic minerals (excluding gold powder and forged gold as they are subject to zero tax rate); 6. other goods regulated by the State Council.
According to the Provisional Regulations of the People's Republic of China on Value-added Tax, the value-added tax on imported goods is levied by Customs. The value-added tax for self-use items carried by individuals or mailed inbound is calculated together with the tariff.
3. Import consumption tax = (dutiable value + import tariff) ÷ (1-consumption tax rate) × consumption tax rate
According to the Consumption Taxable Items and Tax Rates (Tax Amounts) Table attached to the Provisional Regulations of the People's Republic of China on Consumption Tax, 11 categories of goods including tobacco, wine and alcohol, cosmetics, skin care and hair care products, jewelry, jade products, firecrackers, gasoline, diesel, auto tires, motorcycles and cars are subject to consumption tax. The table also lists the applicable tax rates for each taxable good, with a maximum of 45 percent and a minimum of 3 percent.
The goods whose consumption tax is levied by volume are yellow wine, beer, gasoline and diesel. The rate for yellow wine is 240 yuan per ton and for beer is 220 yuan per ton. The rate for gasoline is 0.2 yuan per liter, and for diesel is 0.1 yuan per liter.
The formula for calculating consumption tax levied on the basis of volume is: taxable amount = unit tax amount × import quantity