FINANCE

China’s New Gold VAT Rules Prompt Banks to Halt Physical Gold Redemptions

Published: Nov. 4, 2025 3:43 a.m. GMT+8

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One kilogram gold bullions at the YLG Bullion International Co. headquarters in Bangkok, Thailand. Photo: Bloomberg

Chinese major banks temporarily suspended parts of their gold savings businesses starting Monday, after new value-added tax (VAT) rules on gold transactions took effect on Nov. 1, issued by the Ministry of Finance and the State Taxation Administration.

The suspensions, mainly affecting new purchases and physical redemptions of gold savings products, were triggered by operational and compliance adjustments as banks rassessed the impact of the new tax policy. Some banks resumed services later in the day, while others remained partially paused.

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Major Chinese banks temporarily suspended gold savings services after new VAT rules on gold took effect November 1, 2024.
Suspensions mainly affected new purchases and physical redemptions; some banks resumed full services later, while others remained partly paused.
The new policy imposes more complex tax requirements for physical gold delivery, sparking temporary market disruption and investor concerns.

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Who’s Who

Industrial and Commercial Bank of China Ltd.: Industrial and Commercial Bank of China Ltd. (ICBC) initially suspended new account openings, purchases, and physical gold withdrawals for its "Accumulation of Ruyi Gold" program due to new VAT rules on gold transactions. This caused concern among investors. However, ICBC resumed full services on the same afternoon.

China Construction Bank Corp.: China Construction Bank Corp. (CCB) temporarily suspended purchases and physical redemption for its "Easy Gold" program. Unlike some other banks, CCB had not resumed these services by Monday. This suspension was in response to new VAT rules on gold transactions, leading to operational and compliance adjustments within the bank.

Agricultural Bank of China Ltd.: Agricultural Bank of China Ltd. did not publicly announce changes to its gold savings business. However, branch staff confirmed that gold redemption had been suspended. This adjustment, like those by other major banks, is attributed to new VAT rules on gold transactions.

China Merchants Bank: China Merchants Bank temporarily adjusted its gold operations by removing gold bars from its app's redemption menu, leaving only jewelry options. Bank staff stated these changes were due to a system upgrade related to new tax rules on gold transactions.

Citic Securities: Citic Securities has observed that bank gold savings products, which are typically investment-oriented, now face increased tax complexity when customers opt for physical delivery. This new situation is prompting banks to implement system upgrades and conduct thorough risk reviews.

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What Happened When

Nov. 1, 2025：: New value-added tax (VAT) rules on gold transactions took effect, issued by the Ministry of Finance and the State Taxation Administration.

Nov. 1, 2025：: China’s finance and tax authorities issued a new policy distinguishing tax treatment between investment and non-investment gold at the point of physical delivery.