This unit is engaged in precious metal (gold) hedging business and belongs to commodity futures. In 2009, more than 30,000 transactions were included in investment income. The problem now is that commodity futures are not physical delivery, so they are neither VAT nor business tax.
Document basis: Article 18 of the newly revised Detailed Rules for the Implementation of the Provisional Regulations on Business Tax stipulates that:
The business of buying and selling foreign exchange, marketable securities, futures and other financial commodities mentioned in Item (4) of Article 5 of the Regulations refers to the business of buying and selling foreign exchange, marketable securities, non-commodity futures and other financial commodities engaged by taxpayers. Commodity futures do not pay business tax.
Commodity futures (including commodity futures and precious metal futures)
Provisional regulations on value-added tax 1. Commodity futures (including commodity futures and precious metal futures) belonging to special value-added tax products (1) shall be subject to value-added tax, which shall be paid when the futures are delivered in kind;
Therefore, hedging is only a tax payment in physical delivery.