What Is the Amendment to the De Minimis Rule? Impact on Temu and SHEIN and Future Countermeasures

What Is the De Minimis Rule? — "How the System Works and Conditions for Exemption"

The "De Minimis Rule" is

a system that exempts small-value imported goods from customs duties and consumption tax.

In Japan, goods with a dutiable value of 10,000 yen or less

as a general rule, no customs duties or consumption tax are levied.

This system was introduced to reduce the administrative burden on customs authorities

and to streamline customs clearance procedures;

and is a mechanism commonly adopted internationally.

For consumers, it offers the benefit of being able to easily make small-value overseas purchases,

and has significantly contributed to the expansion of the cross-border e-commerce market and the growth of personal import businesses.

Background of the Review: The Impact of the Rapid Growth of Temu and SHEIN

In recent years, Chinese cross-border e-commerce platforms such as "Temu" and "SHEIN" have experienced rapid global growth.

In 2024, Temu became the most downloaded e-commerce app worldwide, with SHEIN ranking a close second in popularity.

These platforms are designed to qualify for Japan’s de minimis rule (a tax exemption system for low-value imports)

to qualify for Japan’s de minimis rule (tax exemption for low-value imports).

A key feature of this sales model is that it enhances price competitiveness while keeping the tax burden low within the framework of the system.

On the other hand, in response to this situation,

domestic small and medium-sized e-commerce businesses are voicing concerns such as “we are at a price disadvantage” and “overseas operators are taking over the market,”

and calls for a review of the competitive environment to ensure fairness are growing.

Ministry of Finance Policy: Review of the System Ahead of the Introduction of the Consumption Tax

In light of these circumstances, the Ministry of Finance is actively considering a review of the de minimis rule as part of its tax reform efforts.

Currently, the following approaches are primarily under discussion:

・A proposal to maintain customs duty exemptions while applying consumption tax only

・Introducing tax registration and tax payment obligations in Japan for overseas businesses

・The emergence of a proposal to require businesses like Temu and SHEIN to collect and report consumption tax at the point of sale

However, the specific details regarding registration procedures and the timing of taxation

are expected to be finalized through future system design and deliberations in the Diet.

Global Trends: Case Studies from the U.S., Vietnam, and the EU

The decision by Japan to review its system is driven by an international trend in which other countries are taking similar steps.

・United States: In May 2024, the Biden administration announced additional tariffs on Chinese products.

Calls from Congress and industry are growing for a review of the duty-free allowance for goods valued at $800 or less (the de minimis rule).

・Vietnam: In February 2024, Vietnam effectively abolished tax exemptions for small-scale imports and transitioned to a system that taxes all imported goods.

・EU: In July 2021, the VAT exemption for imports valued at €22 or less was abolished.

Value-added tax (VAT) is now levied on all goods, and platform taxation has also been introduced.

As such, in response to the rapid expansion of cross-border e-commerce, efforts to close tax “loopholes” related to small-value imports are accelerating globally.

The Impact of Regulatory Changes: What This Means for Consumers and Businesses

If the system is actually changed, the groups most directly affected will be consumers and businesses that source goods from China.

● Impact on Consumers

Even low-priced items sold on platforms like Temu and SHEIN, which cost between a few hundred yen and around 1,000 yen,

may be subject to consumption tax.

As a result, in addition to the product price, costs such as customs clearance fees and shipping charges are expected to increase,

resulting in more cases where the total amount paid is higher than before.

● Impact on Businesses

For small businesses that have been sourcing goods from Temu and SHEIN,

the imposition of consumption tax on purchases that were previously tax-exempt will increase their cost of goods sold,

potentially reducing profit margins.

In particular, for sole proprietors and small businesses operating cross-border e-commerce as a side business,

it is conceivable that they may need to reevaluate their business models.

On the other hand, for businesses that are already paying taxes appropriately within Japan, there is hope that this will level the playing field and lead to a healthier market overall.

Future Strategies: Where Should the Import Business Go From Here?

It is only a matter of time before the de minimis rule is revised.

To ensure the continued stability of your import business, the following measures are required:

・Securing reliable sourcing channels

When using platforms such as 1688 or Taobao,

it is essential to partner with an import agent who can reliably handle quality control, price negotiations, and delivery schedule management.

・Selecting products with profit margins in mind

It is necessary to shift the focus

.

・Utilizing partners who can assist with customs clearance and tax compliance

▶ We recommend using HubBuyer

"HubBuyer" is an import agency that supports Chinese e-commerce sites such as 1688, Taobao, and Tmall

and supports Japanese.

It provides a one-stop service covering everything from

in a one-stop service.

We are fully equipped to handle the requirements arising from regulatory changes, such as

, making us a resilient partner ready for future changes.

We also offer a full range of features to support sales growth, including product image creation using AI image generation, OEM consultations,

label replacement, and packaging modifications—all designed to help boost your sales.

Which product categories should we watch out for following the regulatory changes?

In the import business following the regulatory changes, there is a need to shift from the previous model of handling large volumes of low-cost small items

a strategy centered on higher-priced, high-value-added products.

Below, we introduce product categories that are expected to attract particular attention in the future.

● Beauty and Health Products

Beauty devices and skincare products are a category where items typically have relatively high unit prices and it is easy to establish a unique selling point.

It is also a field where OEM manufacturing and branding are straightforward, making it easier to establish your own brand.

● Gadgets and Smartphone Accessories

This is a sector where trends change rapidly and repeat customer demand is high.

By selecting items that prioritize design and functionality,

you can offer value beyond the price point and maintain healthy profit margins.

● Fashion & Miscellaneous Goods (Mid-range and above)

By shifting to products in a slightly higher price range than before, it becomes easier to secure profit per order.

By incorporating OEM products and original designs,

you can develop a product lineup with a unique identity that is less susceptible to price competition.

In these categories, the quality of product images and descriptions is a critical factor that directly impacts purchase rates.

With "HubBuyer," you can seamlessly prepare the materials and systems necessary for e-commerce sales through AI-powered image generation and a dedicated Japanese support team.

Summary: The System Overhaul Is Not the "End," but a "Turning Point"

For users who have relied on overseas online shopping and personal imports, the revision of the de minimis rule

a regulatory change that could lead to a certain increase in costs.

However, on the other hand, this presents an opportunity to correct the previously unbalanced competitive environment and

and an opportunity to make Japan’s e-commerce market more robust and sustainable.

For those engaged in the import business, it is important to view this change not as “the end,”

but rather a “turning point” to reevaluate the quality of their business and enhance their competitiveness.

A reliable import agent—

such as “HubBuyer,”

and establishing a system capable of adapting flexibly to the post-reform environment,

you will be able to grow your business in a stable and sustainable manner even under the new rules.