China has abolished a long-standing tax incentive on gold sales, a policy shift that could lift consumer costs and alter pricing dynamics in one of the world’s largest bullion markets.
Effective November 1, the Ministry of Finance said gold retailers will no longer be allowed to offset value-added tax (VAT) on gold purchased from the Shanghai Gold Exchange, according to Bloomberg. The change covers all forms of gold — from bullion and coins to jewellery and industrial-grade materials — marking a major overhaul of China’s taxation framework for the precious metal.
Analysts at ANZ Research said investors in China were “disappointed” by the new rule, which removes a key tax advantage that had long supported gold trading activity. The bank noted that the decision could have wide repercussions, given China’s position as one of the world’s largest gold consumers, and may prompt adjustments in retail pricing and investment demand. The move comes amid a broader tightening of fiscal discipline and efforts by Beijing to streamline tax structures across key commodity markets.
