[Global IDT Insights] China Issues Revised VAT Policies on Gold Trading Through Exchanges

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  • Last Updated on 19 November, 2025

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China VAT rules for gold trading

Editorial Team – [2025] 180 taxmann.com 516 (Article)

Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.

1. China Issues Revised VAT Policies on Gold Trading Through Exchanges

China’s Ministry of Finance and the State Taxation Administration have jointly issued an announcement, outlining revised value-added tax (VAT) policies applicable to transactions in standard gold conducted through the Shanghai Gold Exchange and the Shanghai Futures Exchange. The measures take effect from 01-11-2025 to 31-12-2027.

The announcement provides comprehensive rules governing VAT treatment for gold trading, physical delivery, invoicing, and related administrative compliance.

Key provisions include:

(a) VAT exemption for exchange trades

When member units or clients trade standard gold through the specified exchanges, the selling party is exempt from VAT. If no physical delivery occurs, the exchanges implement VAT exemption.

(b) Transactions involving physical delivery

For gold purchases made for investment purposes, the exchange implements an immediate refund of VAT and exempts related surcharges.

For purchases made for non-investment purposes, VAT exemption applies with input tax deductible at a 6% deduction rate.

Member units authorised to produce legal tender gold coins (other than Panda bullion coins) must pay VAT as per existing rules.

(c) Direct sales outside exchanges

Entities selling standard gold without transacting through an exchange must pay VAT in accordance with current regulations.

(d) Change of purpose after delivery

Procedures have been established for adjusting VAT treatment when the intended use of the gold changes after delivery, such as when it shifts from an investment to a non-investment purpose. This includes issuing red-letter invoices and reissuing standard invoices to reflect the change.

(e) Compliance and enforcement

The exchanges are required to adjust VAT treatment and suspend invoice issuance for members that fail to report changes in use or engage in serious VAT-related violations.

(f) Administrative measures

The State Administration of Taxation will formulate separate rules for VAT collection and administration of gold exchange transactions.

These revisions aim to streamline VAT compliance for gold trading and enhance regulatory oversight, ensuring clearer rules for both domestic and international traders.

Source – Official News

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied