contribution to the marketing strategy and brand management of luxury goods in China.

From the perspective of international trade, Shi Binghua [30] (2013) made an empirical study, on the basis of price index verification, the relationship between luxury consumption and tax regulation in China is discussed by using gravity model. And on the basis of delineating the scope of luxury goods and understanding the luxury tax rate policy, innovative and reasonable calculation of the specific tax revenue of luxury goods provides a reference for empirical research.

To sum up, the reasons for the thermal expansion and outflow of consumption in China’s luxury goods market have been comprehensively analyzed. Although scholars have different approaches to regulating the luxury goods market in China and curbing the thermal expansion and outflow of luxury consumption, but they all focus on tax measures. The analysis of the various economic effects of the tax measures of tariff and consumption tax on luxury consumption behavior is helpful to put forward comprehensive measures for the healthy development of luxury consumption in China.

5. Suggestions on Tax Policy of Luxury Goods Market in China

5.1. Broadening the Tax Base for Imported Luxury Goods

According to the classification of international tax range, Zhang Mengcai and Wang Fuzhuang [42] (2013) thought that our country adopts the international general limited consumption tax. However, compared with the developed economies such as the United States and Japan, the scope of taxation is still different. In western countries, luxury and luxury activities are generally taxed on high-end entertainment consumer goods tax and high-end consumer entertainment tax, and China has not yet been levying. Moreover, the consumption tax is greatly affected by VAT, and the scope is narrow.

Li Xiangju and Zhao Na (2015) [45] thought not only to regulate the scope of the taxation of imported luxury goods, but also to readjust the commodity range of the luxury goods themselves. Because the consumption of luxury goods is associated with the level of social consumption under a certain level of social productivity in a certain period, its definition and scope develop with the development of economy and society, which is relative and developmental. And because the vat has the characteristics of tax neutrality, and there is no special provision for luxury goods, it is not necessary to adjust the value added tax. Only tariffs and consumption taxes can be adjusted. With the increase of income level, the consumer consumption structure is further upgraded, and the tax scope of the consumption tax can be adjusted through the new luxury range.

Li Daming and Wang Meng (2009) [40] thought that we should establish a two level regulation of turnover tax mode, and levy taxes on top luxury and common luxury goods separately, so as to achieve the purpose of regulating income distribution.

5.2. Set Up the Tax Method of Import Consumption Tax Reasonably

Li Daming and Wang Meng (2009) [40] suggested that the consumption tax of luxury goods should be changed from intra-valorem tax to extra-valorem tax, and the relationship between them should be straightened out. Play a tax guiding role, for example, by specifying the price of goods and the amount of consumption tax separately on invoices, so that consumers know the specific amount of tax they bear, thereby affecting their consumption decisions and behavior. At the same time, consumers can also realize the supervision of producers and distributors.

Meng Xianwei and Wang Jun [46] (2016) also advocated to improve the transparency of tax, to ensure the effect of tax increase or reduction, to change the mode of tax collection in China, and to change the internal tax into non-value tax. In this way, not only can consumers enjoy the benefits of tax reduction, but also can really play the role of tax in the delaminating of luxury goods.

5.3. Adjusting the Tax Rate of Luxury Goods and Enhancing the Regulating Function of Tax

With the improvement of the consumption level of Chinese Residents, Li Xiangju, Zhao Na [45] thought that the cosmetics and perfumes have gradually become popular consumer goods among the six major luxury items purchased by Chinese people overseas. Therefore, the duty and consumption tax rates on these commodities should be reduced. At the same time, the tax rate on luxury goods such as yachts, golf balls, private jets, luxury homes and other consumer goods should be appropriately raised.

Ma Longlong, Liu Chang [29] considered that structural tax reduction can be carried out for different categories, giving priority to reducing the tax rate of goods with large price difference, such as clothing, luggage, jewelry and so on. According to different kinds of taxes, we can not only strategically arrange the order of tax reduction, give priority to reducing tariffs, but also comprehensively implement the policy of combined tax reduction, so as to strengthen the intensity and flexibility of tax policy.

Zhao Lan [32] thought that we should design a specific plan for reducing taxes. We should carry out the structural tax reduction according to the requirements of the central economic work conference, stabilize the tax source step by step and adjust the tax rate step by step, so as to guide the return of luxury consumption.

5.4. Other Tax Proposals

In the aspect of strengthening the luxury tax collection, Meng Xianwei, Wang Jun (2016) [46] believed that one of the problems facing the tax collection of luxury goods in our country is the overflowing of luxury goods consumption. With the expansion of the outbound tourism, the luxury goods purchased by tourists often fail to pay value-added tax and consumption tax according to the tax law of our country, resulting in a great loss of luxury tax, resulting in a large loss of luxury tax. Therefore, as the only link in the import of luxury goods tax, we should strengthen the collection and management of customs departments, by means of increasing the punishment and raising the coverage of the inspection to combat tax evasion behavior.

On the strategy of tax adjustment, Ma Longlong and Liu Chang (2013) [29] considered that:

1) We can adjust the collection of single tax or tax combination directly;

2) Through the domestic duty-free shops, bonded zone retail and other innovative ways to create “in-and-outside” emerging consumption patterns, to achieve the indirect regulation of the tax system.

In addition, there are also some suggestions to guide luxury consumption reflow by setting up tax free channels for luxury goods, adding airport duty-free shops, tax-free zones, implementing shopping rebates and other measures.

6. Summary

In recent years, China’s luxury market has developed rapidly and has become the largest luxury market in the world. But throughout the international luxury market, most of the top luxury brands are from Europe, the United States and Japan. China’s local luxury brands are difficult to establish in the international market. We must draw lessons from mature luxury goods markets such as Europe and the United States, formulate tax strategies that meet the characteristics of products and market demands, and carefully choose the scope of taxation and tax rates in light of the characteristics of blind expansion and outflow in luxury goods consumption in China. And with a reasonable model of valorem tax, the specific tax should play its due role in regulating consumption, promoting economic development, improving income distribution and other economic functions. The great potential of local luxury brands in China should be full played, and then the Chinese luxury goods market to the international stage needs acceleration.

7. Limitations

The strong momentum of luxury consumption has led all sectors of society to pay attention to the consumption of luxury goods, and the most important research direction is the tax system for the problem of the hot rise and outflow of luxury goods. Based on the reference and summarization of the research on luxury goods, this paper summarizes the definition of luxury goods and the motive of luxury consumption. This paper summarizes the characteristics of the status quo of the luxury market and the reasons behind it, and summarizes the tax policy Suggestions.

But this article also has some limitations, first of all, for how to draw a tax system reform methods and measures, this article can’t reach the whole complex system, because of the tax system reform is a profound and complex systems engineering, the authority has no official clear definition on luxury goods, the government has not yet been formulated specifically luxury tax system; Secondly, the existing literatures mainly focuses on the theoretical analysis of luxury goods. In the empirical part, due to the lack of clear and effective tax data, there are few existing researches. In the analysis of the quantitative index of luxury goods, how to rationally stratify the domestic luxury goods and make data statistics need to explore more scientific and reasonable indicators in the future research.


Upon the completion of this thesis, I would like to express my hearty appreciation to all those who have granted me invaluable help.

Conflicts of Interest

The authors declare no conflicts of interest.


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