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Superimposed taxes push up prices of luxury items in China

22 Feb '13
1 min read

Superimposed taxes and levy of various types of fees is the main reason for higher prices of luxury items sold in China.
 
At present, luxury goods sold in China are much more expensive than in other markets, even though China is replacing traditional European and American countries to become the main force of luxury goods consumption, and major international luxury brands are also paying greater attention to the Chinese market.
 
The import tariffs on luxury goods in China are indeed creating a major difference in prices of luxury goods in China and abroad, according to analysts.
 
China implements higher import tariff policy on luxury goods and the tax ranges from 6.4-25 percent. In addition, sales of luxury goods in the country attract value-added tax, consumption tax and business tax.
 
Secondly, the distribution costs, including mall rent and a variety of management fees, are included in the final retail price of the products.
 
Marketing costs also account for a portion of higher price of luxury goods in China.
 
Thus, the overall price of luxury items is about 2-3 times higher than import CIF (cost, insurance and freight) price.
 

Fibre2fashion News Desk - China

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