An import is a good or service brought into one country from another. The word "import" is derived from the word "port," The word "import" is derived from the word "port," since goods are often shipped via boat to foreign countries. China classifies imports into three categories - prohibited, restricted and permitted categories. Certain goods (e.g. wastes, toxics) are banned from being imported, while select products in the restricted category are subject to strict restrictions by requiring quotas or licenses.
Most goods fall into the permitted category. Importers are free to decide how much and when to purchase. MOFCOM implements an Automatic Licensing system to monitor the import of part of these goods (e.g. machinery, electrical products). Companies importing products from, or exporting products to, China will generally come into contact with the following three types of taxes.
Value-added tax
All goods imported into China are subject to the nation’s value-added tax (VAT) of either 13 percent or 17 percent. The 13 percent tax is available for certain goods that fall mainly within the categories of agricultural and utility items, while the 17 percent tax applies to other goods subject to the VAT tax.
Consumption Tax Rate
China’s consumption tax (CT) is imposed on companies and organizations that manufacture and import taxable products, process taxable products under consignment, or sell taxable products.
Imported products taxable under China’s consumption tax include those that are harmful to one’s health like tobacco or alcohol, luxury goods like jewelry and cosmetics, and high-end products such as passenger cars and motorcycles. For imported goods, consumption tax varies are depending on the type of product being brought into the country.
Customs Duties
Customs duties include import and export duties, with a total of 8,294 items taxed, according to China’s 2016 Customs Tariff Implementation Plan (“2016 Tariff Plan”). Customs duties are computed either on an ad valorem basis or quantity basis.
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