China withdraws tax exemptions on platinum and diamonds

The Chinese government will begin collecting VAT on sales of domestic and imported platinum, as well as on imported platinum jewelry, effective November 1, 2025, the country's Ministry of Finance announced.

China is ending a long-standing tax exemption on platinum for the state-owned giant, potentially opening the market to new entrants. Currently, China Platinum Co. is the only company permitted to import the metal without paying a 13% VAT.

Experts believe the policy change should benefit the industry in the long term and allow industrial platinum consumers to hedge against price declines as new market entrants begin trading platinum on a level playing field.

Following the news, platinum prices on the Shanghai Gold Exchange jumped to more than 10% above global spot prices. Market players predict that a sharp rise in platinum prices in Shanghai could trigger an influx of the metal into China before the November 1 deadline, and that the tax will inevitably impact inflows into the country in the long term.

Platinum is one of the fastest-growing commodities this year, having already risen by approximately 77% amid market tension. Demand for this metal, used in catalytic converters and laboratory equipment, could exceed supply by the end of the decade.

Concurrently, the Chinese government has revoked the preferential tax regime of the country's main diamond exchange. Effective November 1, diamond importers through the Shanghai Diamond Exchange (SDE) will no longer be able to enjoy the significantly reduced rate.

The current tax rate for diamonds is 4%: diamonds imported through the SDE are subject to VAT at the original rate of 17%, but 13% is refunded. All other diamonds are subject to the full import VAT rate of 17%. A similar system applied to diamonds processed domestically and sold through the SDE.
Rough diamonds are subject to 0% VAT when imported through the SDE, but industrial diamonds are not eligible for this exemption and are subject to standard import VAT and duties.

Experts are already predicting that the introduction of VAT for the diamond sector could harm the natural diamond market and encourage the development of local lab-grown diamond production.

 Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished