Chinese authorities are extending tax breaks for returned cross-border e-commerce export goods, a move underscoring the country's ongoing efforts to reduce costs for e-commerce businesses and support the growth of new foreign trade models.

The announcement, jointly issued by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration, said that the preferential tax policies will be further extended to run from Jan 1, 2026, to Dec 31, 2027.

Goods declared for export under a majority of customs supervision codes for cross-border e-commerce will be exempt from import duties, import value-added tax (VAT), and consumption tax, provided they are returned in their original state within six months from the date of export due to sluggish sales or returns, according to the announcement.

The move is welcomed by the cross-border e-commerce sector. Wang Xin, executive president of the Shenzhen Cross-border E-commerce Association, noted that the policy hits the nail on the head by tackling the industry's twin headaches: the increased costs of time and capital for handling returns.

She emphasized that this positive signal will allow companies to sharpen their inventory turnover and shift toward more flexible supply chain models.

"Looking ahead, we expect targeted tariff protocols for returned goods requiring time-consuming repairs to be introduced in the coming months. Such steps are essential to meet industry demands and deliver tangible cost savings for companies," Wang added.