LFX(SH:600612) Sou Hu Cai Jing·2025-11-07 17:44Core Viewpoint - The recent announcement regarding tax policy adjustments on gold trading in China aims to regulate the market, prevent tax evasion, and support the country's gold reserves and the internationalization of the Renminbi [2][3][14]. Tax Policy Changes - The new tax policy introduces changes in the invoicing and deduction rules for certain gold transactions, shifting from a 13% VAT special invoice (deductible) to a 6% ordinary invoice (non-deductible) [4][5]. - This change increases the cost for merchants, which is expected to be passed on to consumers, leading to higher prices for retail gold purchases [6][7]. Market Impact - The policy divides the gold market into two segments: investment gold transactions remain unaffected by the new tax, while consumer gold purchases face increased taxation [9][10]. - Retail gold companies like Lao Feng Xiang and Chow Tai Fook have seen their stock prices drop, while prices in the Shenzhen market surged to compensate for the new tax [2][10]. Strategic Intent - The government aims to close loopholes in tax collection and guide the market from gold consumption to investment, thereby enhancing the management of gold reserves and supporting the internationalization of the Renminbi [13][14][20]. - The policy addresses past issues of tax evasion where businesses disguised consumer gold as investment gold to avoid taxes, leading to significant revenue losses for the state [15][16]. Future Implications - The new regulations are expected to encourage individuals to invest in gold through more formal channels like banks and ETFs, rather than holding physical gold [19][24]. - This shift is seen as a way to centralize gold reserves, making them easier to manage and providing a stronger backing for the Renminbi's international status [20][25].