On November 1st, the Chinese Ministry of Finance and the State Administration of Taxation jointly released an announcement regarding the tax policy on gold, which specified that gold purchased through non-exchange channels would incur relatively higher taxes, leading to an increase in costs for jewelry businesses and triggering intense reactions in the capital markets. Both offline and e-commerce channels have seen many brands either removing investment gold bars from sale or significantly raising their prices.
According to the announcement, by the end of 2027, sellers of standard gold traded through the Shanghai Gold Exchange or Shanghai Futures Exchange, without physical delivery taking place, will be exempt from value-added tax. However, if physical delivery occurs, the gold will be classified for tax purposes based on its intended use, whether for investment or non-investment purposes.
For gold intended for non-investment purposes, no value-added tax will be imposed by the exchange, but sellers must issue regular invoices to buyers based on the actual transaction price. Buyers who are general taxpayers of value-added tax can calculate the input tax amount based on the invoice total and a deduction rate of 6%.
Before the implementation of the policy, individuals trading gold on exchanges had enjoyed tax exemptions. However, when purchasing gold through retail channels such as jewelry stores or bank counters, the price already included the seller’s paid value-added tax.
Since the new policy has been put in place, gold purchased through non-exchange channels has had value-added tax included in the price, resulting in a higher tax burden. Individuals transferring gold will still be subject to 20% personal income tax under the category of “income from property transfers.”
According to “BossMind,” Citigroup analysts estimate that the sudden adjustment in the tax policy will reduce the tax deduction rate for jewelry businesses purchasing gold from 13% to 6%, potentially leading to a substantial increase of about 7% in gold procurement costs. If companies cannot fully pass on the cost increase, retail prices may remain unchanged, affecting the net profits of leading companies like Lao Feng Xiang and Chow Tai Fook by 15% and 26% respectively in the 2026 fiscal year.
Morgan Stanley pointed out that the policy change will impact the entire industry chain and compel small and medium-sized retailers to change their procurement methods by shifting to directly purchasing gold from exchanges to alleviate tax pressures.
On the day the policy was announced, the market reaction was extremely strong: starting from the afternoon of November 1st, many Chinese consumers were shocked by the soaring prices of gold bars. Some online comments expressed surprise at the rapid price increases and questioned whether gold bars would still be available for sale.
Reported by Urban Express, Mr. Chen from Hangzhou, who has been investing in physical gold for years, mentioned that the prices of branded investment gold bars were typically $10-20 higher than the daily market price. For example, on October 31st, when the market price was around 918 yuan, the price of many gold bars on November 1st was around 928 yuan per gram.
By the evening of November 1st, the official flagship store of Caibai Jewelry displayed that regular wealth gold bars were out of stock (previously priced at around 948 yuan per gram). The current gold bars available for sale in the store mainly include zodiac-themed and birthday gold bars, ranging in prices from 1132 yuan per gram to 1134 yuan per gram.
Inside the Lingfengjintian Tmall flagship store, pure gold investment bars were also shown as out of stock. The remaining products for sale included zodiac-themed gold bars, zodiac-themed mini gold ingots, and wedding-themed gold bars, with prices ranging from 1020 yuan per gram to 1047 yuan per gram.
Looking at the Tmall platform, on November 1st, branded investment gold bars and gold ingots priced below one thousand yuan per gram nearly disappeared.
Among the turbulent situations in e-commerce and jewelry stores, the prices of investment gold bars in bank channels have remained relatively stable. However, some local netizens have noticed shortages of bank gold bars in certain areas.