A new gold tax policy has been introduced! Why are buyers of gold jewelry suddenly paying an extra 7%?

Question

At the beginning of November, a dramatic scene unfolded in gold shops across the country: the price of gold rose dramatically within a single day, with the gold price in Shenzhen's Shuibei market even breaking the 1000 yuan per gram mark. Meanwhile, many banks suddenly suspended their physical gold withdrawal services.

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A new gold tax policy has been introduced! What’s the deal with the sudden additional 7% charge on purchasing gold jewelry?

At the beginning of November, a dramatic scene unfolded in gold shops across the country: the price of gold rose continuously within a single day, with the gold price in Shenzhen's Shui Bei market even temporarily surpassing the 1000 yuan per gram mark. Meanwhile, many banks suddenly suspended the withdrawal of physical gold.

The source of all this is a new “gold tax policy” that will be implemented starting November 1, 2025. The essence of this policy can be summarized in one sentence: the state uses tax leverage to return gold to its original attributes—investment is for investment, and consumption is for consumption.

Gold on a Hot Pan: The Market “Chaos” Caused by New Policies

After the policy was introduced, the market instantly “exploded”. The most direct manifestation is that the gold price surged in response. For example, the gold price in a jewelry market in Hangzhou was adjusted three times within one day, rising from 928 yuan/gram to 1048 yuan/gram.

At the same time, several banks, including Industrial and Commercial Bank of China and China Construction Bank, announced that they have suspended the physical withdrawal of accumulated gold business. This caught many consumers who hoped to invest in physical gold regularly through bank channels off guard.

Why can a tax policy have such great power? The answer lies in a small “invoice.”

II. Core of the New Policy: “Tax Reform” Triggered by a Single Invoice

To understand the new policy, one must first understand China's gold “reservoir” - the Shanghai Gold Exchange and the Shanghai Futures Exchange. Almost all the gold circulating domestically originates from here.

The previous tax policies were relatively simple, basically “immediate collection and immediate refund” or tax exemption, with low tax costs. The biggest change in the new policy is the first strict distinction between the final use of gold:

● Investment purpose: refers to gold bars, gold ingots, etc. with a purity of ≥99.5%, used for value preservation and appreciation.

●Non-investment purposes: refers to gold jewelry, handicrafts, industrial gold, etc., used for daily consumption and production.

This directly leads to a stark contrast in tax treatment:

●If a company withdraws gold from the exchange to create investment-grade gold bars, the exchange will issue a special VAT invoice (which allows for a 13% tax deduction). However, when the company sells the gold bars, it can only issue a regular invoice, and the VAT chain is interrupted at this point.

●If a company extracts gold for the creation of non-investment products like jewelry, the exchange is exempt from tax and only issues a regular invoice. The company can only deduct 6% of the invoice amount for input tax.

Here comes the key point! Originally, businesses could deduct 13% of taxes, but now they can only deduct 6%. This 7% tax cost gap has become an additional cost that gold shops and banks have to face. To ensure profits, the most direct choice for merchants is to pass this cost onto consumers - this is the fundamental reason why the price of gold jewelry has risen 7% overnight.

Three, what practical impact does it have on us ordinary people?

Buying Gold Jewelry: It has indeed become more expensive. If you plan to purchase gold jewelry for wearing, then sorry, after the new policy, the price on the tag has genuinely included that additional 7% cost. It's like an “invisible tax,” adding another layer to the cost of beauty.
Invest in gold: The mindset needs to change significantly.

●Physical gold bars: The purchase cost has increased, and when liquidating in the future, the recycling channels may also face the same tax issues, potentially resulting in a larger price difference. The model where “Chinese aunties” buy gold bars to hoard for appreciation is no longer as cost-effective as before.

● Gold financial products: The direction encouraged by the new policy has arrived! For those who truly want to invest in gold, the new policy has actually “pointed out a clear path.” Any investment method that does not involve the physical delivery of gold still enjoys tax benefits.

This includes:

○ Gold ETF (can be purchased in stock accounts) ○Paper Gold ○Gold futures are convenient to trade, cost-effective, and have good liquidity, making them a superior choice for gold investment in the new era.

Cashing in old gold: The impact is minimal. If you just want to cash in your old gold jewelry or old gold bars, you can rest assured. Occasional and small non-business transfers between individuals currently do not involve value-added tax and personal income tax, and the impact is negligible.
Summary: The purpose of the new policy is not to “increase taxes,” but to “regulate.”

This reform of the gold tax seems sudden, but in fact, it has been brewing for a long time. Its core purpose is not merely to increase tax revenue, but to address the long-standing issue of the gold market's “one-size-fits-all” rough management.

●Guiding market standardization: directing trading from opaque “private transactions” off-exchange to transparent “standardized transactions” on-exchange, combating money laundering and other illegal activities.

● Enhance international pricing power: Allow China's gold exchanges to gather more trading volume, thereby having a greater voice in the international gold market.

●Suppress short-term speculation: Allow gold resources to flow better into the real economy, reducing pure speculative trading.

In summary, the new policy has drawn a clear line for us: if you want to invest, go buy convenient financial products; if you want to consume, pay a reasonable premium for exquisite jewelry.

As long as we can understand the rules and follow the trend, we can still achieve a win-win situation in asset allocation and consumption needs under the new pattern of “investment is investment, consumption is consumption.”

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