• China ends a long-standing tax exemption for gold retailers, reducing it from 13% to 6% until December 2027.
• The new rule covers both investment-grade gold and non-investment uses such as jewelry and industrial materials.
• Analysts expect higher gold prices as the tax burden shifts to consumers, following a global gold-buying surge.

Gold Tax

China ends the long-standing tax exemption policy for some gold retailers. This will potentially set back the buying spree for the precious metal in the world’s biggest consumer market.

Starting from November 1, 2025, China will no longer allow some retailers to offset a value added tax when selling gold they bought from Shanghai Gold Exchange or Shanghai Futures Exchange. This regardless of whether it is sold directly or after processing.

It is removing the full exemption from 13% value added tax and lowering it to 6% starting Nov 1. This lower exemption will last until December 31,2027. This includes major banks, refineries and fabricators who can directly participate in trading.

The new rule applies to investment-grade gold, including bars, ingots, and coins approved by the People’s Bank of China. It also extends to non-investment uses such as jewelry manufacturing and industrial materials that rely on gold as a key input.

Analysts expect that gold costs will rise as the additional tax is passed on to consumers.  This tax cut is occurring amid a global rush to buy gold. This buying frenzy led to gold reaching record breaking prices setting the stage for gold’s largest drop in 12 years.
Gold has been on the rise since late May and demand has eased due to many factors. This includes the end of the seasonal buying linked to festivities in India and trade truce between US and China. Additionally, the US government shutdown has meant that traders have been left without their weekly report from the Commodity Futures Trading Commission.