With the global tax reform storm coming, the “tax-free bonus” of cross-border e-commerce is gradually disappearing. Chinese sellers are facing unprecedented challenges. How to break the situation has become a key issue.
Tax-free cross-border e-commerce small-value goods have become a thing of the past in Japan.
At the end of 2025, the Japanese government plans to adjust the tax rules for cross-border e-commerce platforms and levy the originally exempted consumption tax on imported goods with a taxable price of less than 10,000 yen (100 yen, approximately 4.5 yuan).
In fact, Japan’s Liberal Democratic Party Tax System Investigation Committee proposed a tax system amendment on December 4, 2025, requiring all imported small-value goods to pay a 10% consumption tax regardless of the amount (previously exempt), which will be officially implemented from 2026.
Data show that in 2024, Japan will import about 170 million pieces of small-value goods under 10,000 yen, an increase of about 5 times compared with 2019, accounting for about 90% of Japan’s total imported packages, of which Chinese goods account for as high as 77% – 90%.
Some industry analysts estimate that the number of imported small-value goods under 10,000 yen in 2025 may reach more than 200 million pieces.
The above-mentioned adjustments to Japan’s tax system amendments have caused a huge shock in the field of cross-border e-commerce.
The tax amendment covers all small-value goods sold to Japan by cross-border e-commerce platforms, regardless of the country of origin.
Packages related to Amazon Global Store, Rakuten, SHEIN, China Temu and other platforms are all subject to collection, especially low-priced and high-frequency daily necessities, clothing, trinkets and other categories.
In addition, Japan’s new tax policy clarifies that cross-border e-commerce platforms with annual sales of more than 5 billion yen must withhold and pay 10% consumption tax on behalf of the seller as a “deemed supplier” and bear the responsibility of reviewing the seller’s qualifications.
Mainstream platforms such as Temu, SHEIN, and eBay have all been included in the supervision.
From a consumer point of view, goods previously worth 1,000 yen almost maintained their original price due to tax exemption. After the new tax policy is implemented, an additional 10% tax will be paid, and the actual price of the goods will increase by about 100 yen.
In addition to consumption tax, Japanese customs may also charge a “handling fee” of about 300 yen per item, which will further push up the actual cost of small-value goods.
In addition, consumers will no longer be able to enjoy the “personal use” tax exemption and will need to declare at the customs, making the process significantly more complex.
Faced with a 10% increase in commodity prices, some price-sensitive Japanese consumers may reduce the frequency of purchases of non-essential goods and switch to local products of the same price range.
From the seller’s perspective, Japan’s new tax and fee policies will push up the dual superposition of tangible and intangible operating costs.
Platforms with annual sales exceeding 5 billion yen (such as Temu and Shein) need to set up tax agencies in Japan to pay taxes on their behalf. This cost is often passed on to sellers or buyers.
As a result, the model of relying solely on low prices to increase volume will be unsustainable, and sellers are forced to increase the added value of their products and adopt branding and localization routes to promote and expand business.
In addition to Japan, the United States, the European Union, the United Kingdom, Vietnam, etc. have successively canceled small-amount cross-border e-commerce consumption tax exemptions.
The EU will launch a transitional policy in 2026, officially canceling the tariff exemption for cross-border e-commerce packages under 150 euros. All small-value packages will need to pay tariffs + value-added tax + national processing fees, and plans to fully integrate them into the unified supervision of the “Customs Data Hub” in 2028.
Starting from January 1, 2026, Thailand will completely cancel the tax-free threshold for all imported goods. Even a cross-border small package of 1 baht (approximately 0.02 yuan) will have to pay customs duties + value-added tax.
These tax and fee policies have had multiple impacts on China’s cross-border e-commerce: the “low-price direct mail” model has been under full pressure, and commodity price competitiveness has generally been weakened; market diversification strategies have become more difficult, and major overseas markets have simultaneously set up barriers, increasing risk diversification costs; compliance requirements have increased significantly, and tax systems and customs rules vary greatly between countries, and companies need to invest resources and adapt to different market regulations; the industry has accelerated reshuffling, the living space of small and medium-sized low-value-added sellers has been compressed, and resources have been concentrated on leading companies, promoting the industry’s transformation from extensive growth to standardized development.
After the small tax exemption policy was cancelled, it had a significant impact on sellers.
After the United States canceled small tax exemptions on May 2, 2025, SHEIN’s sales in the United States declined, falling 8% year-on-year in September, the second worst monthly performance in three years.
The cancellation of the tax-free policy directly destroyed the foundation of the low-price distribution model.
On September 6, 2025, the Universal Postal Union, the United Nations specialized agency responsible for international postal affairs, issued a statement stating that postal business volume with the United States dropped by 81% on August 29 compared with the previous day, and 88 postal agencies suspended some services to the United States.
Faced with the tightening of tax policies around the world, including Japan, market observer Jackson Cross-Border Zhiduoxing believes that policy changes targeting the Japanese market should face the changes and act immediately to complete the key transformation from “passively bearing costs” to “actively creating value.”
Guo Tao put forward three transformation suggestions for Chinese cross-border sellers.
The first is to optimize the operating model and vigorously deploy “overseas warehouse +
“Localized Delivery”, reducing logistics and compliance costs through centralized customs clearance and batch declaration, replacing the traditional small package direct mail model; second, upgrading products and brands, reducing the proportion of low-priced and small-value products, shifting to high-margin, high-value-added categories such as beauty products and small home appliances, increasing R&D investment to create differentiated advantages, and improving bargaining power through brand building; third, improving compliance and market layout, proactively completing tax registration in target markets, establishing a standardized compliance system, while exploring emerging markets such as Southeast Asia and Latin America, and diversifying single market policy risks.
In 2026, Japan’s cancellation of small tax exemptions is only part of the global “normalization of cross-border e-commerce.”
For Chinese sellers, the “traffic code” of low prices and free shipping is becoming invalid, and the industry will shift from “tax-free arbitrage” to high-level competition of “compliance + brand + local operations”.
If you complete overseas warehouse layout, tax compliance and brand upgrade as early as possible, you will be able to gain a larger market share under the new rules; if you continue to rely on direct mail and low prices, you may be squeezed out of the mainstream market by multiple tax burdens and platform fees.
For cross-border e-commerce companies and sellers, it is necessary to promptly adjust pricing strategies and improve tax compliance systems to adapt to new challenges and opportunities brought about by changes in the global tax system.
In the future, how to optimize the supply chain and enhance product competitiveness under the premise of compliance will become a key proposition for the sustainable development of the cross-border e-commerce industry.
