【Shigeo’s Review】
This video features certified public accountant and tax advisor Shinya Yamada, who provides a clear explanation of the price competitiveness of low-cost e-commerce platforms originating from China, such as “TEMU” and “SHEIN,” and the regulatory responses from various countries to these platforms.
Particularly noteworthy is the explanation of the “reverse phenomenon,” where these overseas e-commerce sites can offer products at lower prices than domestic Japanese vendors. Yamada focuses on the mechanisms of international shipping costs and Japan’s tax exemption system for purchases under 10,000 yen (the de minimis rule), making it very informative.
Yamada points out that the low prices offered by TEMU and SHEIN are largely due to the efficient distribution structure that eliminates intermediaries, allowing for direct shipping from factories to consumers.
Additionally, it is an important but lesser-known fact that international postal rules allow part of the shipping costs to be covered by the destination country when sending from developing to developed countries, thus reducing delivery costs.
Moreover, the application of the de minimis rule in Japan, which exempts customs duties and consumption taxes for products priced under 10,000 yen, creates a situation where overseas online shopping can be cheaper, even including shipping costs.
However, this “reverse phenomenon” has heightened feelings of unfairness in countries like the United States and the EU, especially during the Trump administration, which saw the implementation of increased tariffs on Chinese products and the abolition of the de minimis rule.
As a result, the U.S. has begun imposing tariffs on small imports, diminishing the advantages of low-cost e-commerce sites from China.
The EU also started applying VAT (Value Added Tax) to all imported goods from 2021, reflecting a global trend towards reconsidering tax exemptions for inexpensive imports.
Until now, Japan has not imposed consumption tax on imports valued under 10,000 yen, contributing to the price disparity with domestic vendors.
According to the video, the Ministry of Finance has finally begun to address this situation and is considering implementing a 10% consumption tax on products priced under 10,000 yen going forward.
Possible tax collection methods include having delivery companies collect the tax on delivery or introducing “platform taxation” where e-commerce platform operators pay the tax directly.
These measures are expected not only to improve the competitive environment for domestic vendors but also to strengthen enforcement against illegal drugs and other issues.
The video also clearly explains the distinction between this and the tax exemption system for travelers. Products under 200,000 yen brought in by travelers will continue to be exempt from tax, and it’s clarified that the de minimis rule only applies to commercial imports.
This clarification is especially beneficial for consumers, as it addresses an area that can easily lead to misunderstandings.
Overall, this video provides a comprehensive and detailed explanation of the pricing structure of low-cost Chinese e-commerce sites and global taxation trends, making it particularly valuable for understanding the implications of policy changes in Japan.
Given the significant changes anticipated for overseas e-commerce users and domestic sellers, the information presented in this video will continue to be an important point of interest.
