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Informist, Friday, Nov. 14, 2025

MUMBAI – Investors trading gold directly on the Shanghai Gold Exchange and Shanghai Futures Exchange through gold exchange-traded funds and commercial banks' gold accumulation plans will continue to enjoy reduced value-added tax, according to a report by Metals Focus released on Thursday. However, while taking delivery of physical gold out of vaults, investors will now be subject to different policies, depending on whether the gold is meant for investment or non-investment purposes. 

On Nov. 1, China's Ministry of Finance and the State Taxation Administration announced adjustments to the value-added tax policy for the gold market, effective immediately till Dec. 31, 2027. Previously, when gold was withdrawn from the Shanghai Gold Exchange and Shanghai Futures Exchange, the tax authority issued a full 13% special value-added tax invoice on behalf of the exchanges. As such, when considering the final product price, value-added tax was charged only on the value added beyond the gold price, the report said.  

According to the new policy, Shanghai Gold Exchange and Shanghai Futures Exchange members who take delivery of physical gold for investment purposes and subsequently resell it will continue to receive the full 13% special value-added tax invoice and pay only 13% value-added tax on the value-added portion of the sale of the investment product such as gold bars. "This means that if retail consumers buy gold bars/coins directly from members of the exchanges, there will be no change in their VAT burdens along with the new policy," the report said. 

However, if the member's customers such as manufacturers or wholesalers resell the gold to others, they will bear an additional 13% value-added tax burden, which will be 13% of the total selling price. "This is because they will receive standard invoices from the member companies, rather than deductible Input VAT invoices," the report said.

Members who take delivery of gold from the exchanges' vaults for non-investment purposes will receive a regular 6% input value-added tax invoice against their 13% output value-added tax. Previously, they received a 13% special value-added tax invoice. The increased tax burden will be passed on to customers such as second-tier wholesalers and retailers and ultimately to retail consumers. 

"Following this change, the retail price of gold jewellery in China has already been adjusted higher, as consumers now need to pay additional VAT costs, with an effective rate of approximately 7%," the report said.  End

Reported by Udita S. Jaiswal

Edited by Avishek Dutta

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