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How should gold trading banks pay turnover tax?
Q: A bank is currently developing two gold trading businesses. The first item is to sell physical gold on a commission basis, and only charge a handling fee, without making a difference. The gold company sends the special VAT invoice directly to the buyer; The second item is to sell paper gold, accept customers' entrustment to buy and sell virtual gold, and banks earn the difference from the capital market, which does not involve actual delivery. What turnover taxes are involved in these two businesses? A: 1. Article 5 of the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China on Several Policies and Provisions on Value-added Tax and Business Tax (Caishuizi [1994] No.26) stipulates that value-added tax is not levied on purchased goods that meet the following conditions at the same time; If the following conditions are not met at the same time, value-added tax will be levied regardless of the accounting system.

(a) The trustee does not advance the funds; (2) The seller will issue the invoice to the entrusting party, and the entrusted party will forward the invoice to the entrusting party; (3) The consignee shall settle the payment with the consignor according to the sales amount and the value-added tax actually charged by the seller (the value-added tax shall be charged by the customs for the goods imported on behalf of the consignor) and collect the handling fee. According to the above regulations, if the bank sells physical gold on a commission basis and meets the above three conditions, the bank does not need to pay VAT when selling gold. Otherwise, banks have to pay value-added tax when selling gold. According to the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Printing and Distributing Notes on Business Tax Items (Trial Draft) (Guo Shui Fa [1993] 149No.), agency refers to the business entrusted by clients, including buying and selling goods, acting as an agent for import and export, introducing services and other agency services. 1. Consigned goods refer to the business of purchasing or selling goods on a commission basis, which is settled according to the actual purchase or sales amount and charges a handling fee.

According to the above regulations, the bank's consignment of physical gold belongs to the taxable service of providing "service industry-agency industry", and the handling fee charged by the bank should be subject to business tax. 2. Paper gold is a paper transaction of gold, and the transaction records of investors are only reflected in the "gold passbook account" opened by individuals in advance, and it does not involve the withdrawal of physical gold. The profit model is to buy low and sell high, so as to obtain the difference profit. Paper gold is actually profitable through speculative trading, rather than investing in physical gold.

The types of paper gold include gold bonds, gold account passbooks, gold warehouse receipts, gold bills of lading, gold bills of exchange and large denomination gold negotiable certificates of deposit, as well as open trading orders in spot gold transactions and special drawing rights of the International Monetary Fund. All belong to the category of paper gold. Article 2 of the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax stipulates that the goods mentioned in Article 1 of the Regulations refer to tangible movable property, including electricity, heat and gas. Therefore, paper gold does not belong to goods, and bank sales of paper gold do not involve value-added tax. Article 18 of the Detailed Rules for the Implementation of the Provisional Regulations on Business Tax stipulates that the business of buying and selling financial commodities such as foreign exchange, marketable securities and futures mentioned in Item (4) of Article 5 of the Regulations refers to the business of buying and selling financial commodities such as foreign exchange, marketable securities and non-commodity futures engaged by taxpayers. Commodity futures do not pay business tax. Paper gold does not belong to foreign exchange, commodity futures and securities. Financial commodities, also known as financial instruments, refer to contracts that form financial assets of enterprises and financial liabilities or equity instruments of other units. We believe that paper gold belongs to other financial commodities. The Notes on Business Tax Items stipulates that the transfer of financial commodities refers to the transfer of ownership of foreign exchange, marketable securities or non-commodity futures. Non-cargo futures refer to futures other than commodity futures and precious metal futures, such as foreign exchange futures. Therefore, buying and selling paper gold by banks is a "financial" business tax taxable service.