CBEC products are considered personal goods and thus are subject to preferential import tax rates. The taxes levied and the rate depends on whether the value of the purchase is within the RMB 5,000 limit for a single transaction, and within the RMB 26,000 maximum annual quota for each person:

• Scenario 1: Within the RMB 5,000 limit for single transactions, and within the RMB 26,000 maximum annual quota for each person. Imported CBEC products are exempted from customs duties, while VAT and consumption tax (if applicable) are charged on 70% of the value.
• Scenario 2: Exceeding the RMB 5,000 limit for single transactions, but within the RMB 26,000 maximum annual quota for each person. CBEC import is still allowed, however customs duties, VAT and consumption tax (if applicable) will be charged in full, and the value will be added into individual annual quota (RMB 26,000). In this case, therefore, the only benefit of the CBEC model relates to easier customs clearance.
• Scenario 3: Exceeding the RMB 26,000 maximum annual quota for each person. Regardless of the value of the single transaction (within our exceeding 5,000 RMB), if the maximum annual quota is exceeded, CBEC import is not allowed at all. Goods must be bought via the general trade channel (i.e. physical stores, traditional e-commerce, etc.). However, in practice, Chinese consumers who have exceeded the quota can still use the ID of friends/family members to buy CBEC goods.

More details on the preferential tax policy for CBEC imported goods, with concrete examples, are available on dedicated resources produced by the EU SME Centre.