China announced Saturday that it will end a key value-added tax (VAT) offset for some gold retailers, effective immediately, in a move that could reshape the domestic gold market. The new policy, valid through the end of 2027, will restrict full VAT deductions to members of the Shanghai Gold Exchange and Shanghai Futures Exchange—mainly major banks, refineries, and fabricators selling gold as investment products. Previously, most fabricators could deduct 13% of input VAT when selling to consumers, but under the new rule, non-member companies can offset only 6%. The change applies to jewelry producers, industrial users, and firms making investment products like bars and coins that are not exchange members. Authorities said the impact will depend on implementation, but analysts expect it could narrow profit margins and weigh on smaller gold fabricators.
