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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