Two departments: Taxpayers who do not sell standard gold through exchanges should pay value-added tax according to current regulations

On November 1st, the Ministry of Finance and the State Administration of Taxation issued an announcement regarding tax policies related to gold. The announcement on tax policies related to gold is as follows:

1. When member units or clients trade standard gold through the Shanghai Gold Exchange and the Shanghai Futures Exchange (hereinafter referred to as the exchanges), the seller member unit or client is exempt from value-added tax (VAT) when selling standard gold. If there is no physical delivery, the exchanges exempt VAT; if physical delivery occurs, the VAT policy applies as follows:

(1) If a member unit purchases standard gold for investment purposes, the exchanges implement immediate VAT refund, and also exempt urban maintenance and construction tax and education fee surcharge, and issue a special VAT invoice to the buying member unit based on the actual transaction price. If the buying member unit directly sells the standard gold or processes it into investment gold products (excluding legal gold currency issued with the approval of the People's Bank of China) and sells it, it should pay VAT according to current regulations and issue a regular invoice to the buyer, and cannot issue a special VAT invoice.

Member units approved by the People's Bank of China to produce and issue legal gold currency, when purchasing standard gold from the exchanges and producing and selling legal gold currency (excluding panda bullion coins that are exempt from VAT), should pay VAT according to current regulations and can issue a special VAT invoice to the buyer.

(2) If a member unit purchases standard gold for non-investment purposes, the exchanges exempt VAT and issue a regular invoice to the buying member unit based on the actual transaction price. If the buying member unit is a general VAT taxpayer, the input tax amount is calculated based on the amount indicated on the regular invoice and a 6% deduction rate. If the buying member unit processes the standard gold into non-investment gold products and sells it, it should pay VAT according to current regulations and can issue a special VAT invoice to the buyer.

(3) If a client purchases standard gold, the exchanges exempt VAT and issue a regular invoice to the buying client based on the actual transaction price. If the client is a general VAT taxpayer, the input tax amount is calculated based on the amount indicated on the regular invoice and a 6% deduction rate. If the buying client directly sells the standard gold or sells it after processing, it should pay VAT according to current regulations and can issue a special VAT invoice to the buyer.

2. Taxpayers who do not sell standard gold through the exchanges should pay VAT according to current regulations.

3. The term "member unit" in this announcement refers to members registered according to the articles of association of the Shanghai Gold Exchange. The scope of applicable member unit policies for the Shanghai Futures Exchange is the same.

The term "client" in this announcement refers to clients registered and filed according to the articles of association of the Shanghai Gold Exchange. Trading entities on the Shanghai Futures Exchange outside the aforementioned member unit scope are subject to the client policies in this announcement.

4. The term "standard gold" in this announcement refers to gold raw materials that meet the following standards in both brand and specifications:

Brand: AU99.99, AU99.95, AU99.9, AU99.5;

Specifications: 50 grams, 100 grams, 1 kilogram, 3 kilograms, 12.5 kilograms 5. The investment purposes referred to in this announcement include direct sales, as well as the processing and production of gold bars, gold ingots, gold coins, or legally issued gold currency with a gold content of 99.5% or above approved by the People's Bank of China. Non-investment purposes refer to situations other than investment purposes.

6. The physical delivery and withdrawal referred to in this announcement means that the member units or clients of the exchange will extract gold from the designated vault of the exchange that has been traded or delivered.

7. For member units purchasing standard gold from the exchange for investment purposes and conducting physical delivery and withdrawal, the unit price, amount, and tax amount of the special VAT invoice shall be determined according to the following provisions:

(1) For the Shanghai Gold Exchange:

Unit price = Actual transaction unit price ÷ (1 + VAT rate)

Amount = Unit price × Quantity

Tax amount = Amount × VAT rate

Actual transaction unit price = Actual transaction amount ÷ (Standard gold transaction quantity + excess/short weight)

Actual transaction amount = Transaction amount + excess/short amount

Transaction amount = Standard gold transaction quantity × Standard gold actual transaction unit price

Excess/short amount = Excess/short weight × excess/short settlement price (excess/short settlement price is determined according to trading rules)

(2) For the Shanghai Futures Exchange:

Unit price = Actual delivery price ÷ (1 + VAT rate)

Amount = Unit price × Quantity

Tax amount = Amount × VAT rate

Actual delivery price = Actual delivery payment ÷ Pickup quantity

Actual delivery payment = Delivery payment + excess/short settlement payment

Delivery payment = Number of standard warehouse receipts × Standard quantity per receipt × Delivery settlement price

Excess/short settlement payment = Excess weight × settlement price of the most recent month’s gold futures contract traded on the Shanghai Futures Exchange on the trading day prior to the settlement date

The actual transaction price referred to in this announcement is the actual transaction amount of the Shanghai Gold Exchange and the actual delivery payment of the Shanghai Futures Exchange, determined according to the last-in, first-out principle, excluding transaction fees, handling fees, storage fees, and other costs.

8. If a member unit purchases standard gold from the exchange and the actual use changes after physical delivery and withdrawal, it shall report the change of use information to the exchange before the change occurs.

Member units shall submit an application for change of use within 6 months from the month of obtaining the corresponding invoice issued by the exchange for the physical delivery and withdrawal of standard gold, and only one application for change of use is allowed; if it exceeds 6 months, the exchange shall not reissue the invoice. Specific handling is as follows:

(1) If the use changes from investment purposes to non-investment purposes, the exchange shall change from immediate VAT refund to exemption from VAT, and shall issue a full red-letter special VAT invoice to the purchasing member unit, and reissue a full ordinary invoice; the VAT refund already obtained does not need to be returned; the member unit shall treat the input tax amount that has been deducted according to the VAT special invoice as an output and calculate the input tax amount according to the amount indicated on the ordinary invoice and a deduction rate of 6%.

(2) If the use changes from non-investment purposes to investment purposes, the exchange shall change from VAT exemption to immediate VAT refund, and shall issue a full red-letter ordinary invoice to the purchasing member unit, and reissue a full special VAT invoice; Member units shall transfer out the input tax amount calculated based on the amount specified on the ordinary invoice and a 6% deduction rate, and shall deduct the input tax amount based on the value-added tax amount specified on the special invoice.

9. Standard gold purchased by member units from the exchange and physically delivered before the implementation of this announcement, if directly sold or processed and then sold after the implementation of this announcement, shall be deemed as the sale of standard gold for investment purposes, and value-added tax shall be paid in accordance with the provisions of Article 1, Item (1) of this announcement. Ordinary invoices shall be issued to the buyer, and special value-added tax invoices shall not be issued.

If member units need to issue special value-added tax invoices to the buyer, the exchange shall change from the immediate collection and refund of value-added tax to exemption from value-added tax, and shall issue red special value-added tax invoices in full to member units, and reissue ordinary invoices in full. The tax refunds already obtained under the immediate collection and refund policy do not need to be returned; member units shall transfer out the input tax amount that has been deducted based on the value-added tax amount specified on the special invoice, and calculate the input tax amount based on the amount specified on the ordinary invoice and a 6% deduction rate.

10. Transaction fees, handling fees, storage fees, and other fees collected by the exchange shall be subject to value-added tax in accordance with current regulations.

Member units purchasing standard gold and applying for physical delivery shall truthfully declare the purpose of purchasing standard gold to the exchange and accurately record the actual purpose and consumption quantity of the purchased standard gold.

11. If member units do not report the change of purpose to the exchange before the purpose changes, and do not issue special value-added tax invoices externally in accordance with the provisions of this announcement, for the first discovery, within 3 months from the month following the discovery, if the member unit purchases standard gold through the exchange and has physical delivery, the exchange shall change from the immediate collection and refund policy of value-added tax to the exemption from value-added tax policy, and suspend issuing special value-added tax invoices and ordinary invoices with deduction functions to that member unit.

For subsequent discoveries, within 6 months from the month following the discovery, if the member unit purchases standard gold through the exchange and has physical delivery, the exchange shall change from the immediate collection and refund policy of value-added tax to the exemption from value-added tax policy, and suspend issuing special value-added tax invoices and ordinary invoices with deduction functions to that member unit.

If a member unit or customer engages in significant tax violations such as fraudulently obtaining export tax refunds using gold tax policies or issuing false special value-added tax invoices, from the month following the issuance of the penalty decision, if they purchase standard gold through the exchange and have physical delivery, the exchange shall change from the immediate collection and refund policy of value-added tax to the exemption from value-added tax policy, and shall not issue special value-added tax invoices and ordinary invoices with deduction functions.

12. The management measures for the collection of value-added tax on gold transactions through the exchange shall be formulated separately by the State Administration of Taxation.

13. This announcement shall take effect from November 1, 2025, and shall be implemented until December 31, 2027, with the applicable time based on the time of physical delivery. The "Notice of the Ministry of Finance and the State Administration of Taxation on Gold Tax Policy Issues" (Cai Shui [2002] No. 142) Articles 2, 4, and 5, and the "Notice of the Ministry of Finance and the State Administration of Taxation on Tax Policies Related to Gold Futures Trading" (Cai Shui [2008] No. 5) shall be abolished from November 1, 2025 This is a notice.

State Administration of Taxation, original title: "Announcement on Tax Policies Related to Gold Issued by the Ministry of Finance and the State Administration of Taxation"

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