Taxation of precious metals

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Precious metals are subject to taxation in most countries, because governments prefer to consider them as taxable goods or property (not money) and see these high-value items as a lucrative source of revenue. In most countries capital gains tax applies when precious metals are sold at a profit. Some countries also apply value added tax to precious metals.

In the European Union, the trading of recognized gold coins and bullion products is VAT exempt, but no such allowance is given to silver. Elsewhere in Europe though, Norway has exempted both gold and silver bullion coins with face value from VAT; Norway is part of the wider EEA (European Economic Area) and thus applies the same "intra-community transaction" rules to all of Europe on a bilateral basis resulting in legally tax-free silver coin availability throughout all of Europe.[ citation needed ]

Canada, and 41 of the 50 United States, do not apply tax to bullion-quality silver and gold. [1] [2] [3]

CountryVAT for silver
Finland [4] 24%
Germany 19%
Netherlands [5] 21%
Poland 23%
Slovenia 20%
Russia 18%
Sweden 25%
Switzerland 7.7%
United Kingdom 20%
Austria 20%

See also

Related Research Articles

<span class="mw-page-title-main">Precious metal</span> Rare, naturally occurring metallic chemical element of high economic and cultural value

Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Precious metals, particularly the noble metals, are more corrosion resistant and less chemically reactive than most elements. They are usually ductile and have a high lustre. Historically, precious metals were important as currency but are now regarded mainly as investment and industrial raw materials. Gold, silver, platinum, and palladium each have an ISO 4217 currency code.

<span class="mw-page-title-main">Bullion</span> Gold, silver, or other precious metals in the form of bars or ingots

Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes from the Anglo-Norman term for a melting-house where metal was refined, and earlier from French bouillon, "boiling". Although precious metal bullion is no longer used to make coins for general circulation, it continues to be held as an investment with a reputation for stability in periods of economic uncertainty. To assess the purity of gold bullion, the centuries-old technique of fire assay is still employed, together with modern spectroscopic instrumentation, to accurately determine its quality.

The fineness of a precious metal object represents the weight of fine metal therein, in proportion to the total weight which includes alloying base metals and any impurities. Alloy metals are added to increase hardness and durability of coins and jewelry, alter colors, decrease the cost per weight, or avoid the cost of high-purity refinement. For example, copper is added to the precious metal silver to make a more durable alloy for use in coins, housewares and jewelry. Coin silver, which was used for making silver coins in the past, contains 90% silver and 10% copper, by mass. Sterling silver contains 92.5% silver and 7.5% of other metals, usually copper, by mass.

<span class="mw-page-title-main">American Gold Eagle</span> Gold bullion coin of the United States

The American Gold Eagle is an official gold bullion coin of the United States. Authorized under the Gold Bullion Coin Act of 1985, it was first released by the United States Mint in 1986. Because the term "eagle" also is the official United States designation for the pre-1933 ten dollar gold coin, the weight of the bullion coin is typically used when describing American Gold Eagles to avoid confusion with the pre-1933 coins. This is particularly true with the 1/4-oz American Gold Eagle, which has a marked face value of ten dollars, the same as that of its predecessor.

A bullion coin is a coin struck from highly refined precious metal (bullion) and kept as a store of value or an investment rather than used in day-to-day commerce. A bullion coin is distinguished by its weight and fineness on the coin. Unlike rounds, bullion coins are minted by government mints and have a legal tender face value. Bullion coins can have fineness ranging from 91.9% to 99.99% purity.

<span class="mw-page-title-main">Perth Mint</span> Australias official bullion mint, situated in Perth, Western Australia

The Perth Mint is Australia's official bullion mint and wholly owned by the Government of Western Australia. Established on 20 June 1899, two years before Australia's Federation in 1901, the Perth Mint was the last of three Australian colonial branches of the United Kingdom's Royal Mint intended to refine gold from the gold rushes and to mint gold sovereigns and half-sovereigns for the British Empire. Along with the Royal Australian Mint, which produces coins of the Australian dollar for circulation, the Perth Mint is the older of Australia's two mints issuing coins that are legal tender. It has been selling diluted gold since 2018 and is facing huge fines and being delisted from the Shanghai Gold Exchange for swindling investors and trying to cover up its action.

<span class="mw-page-title-main">Gold as an investment</span> Investment in gold

Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives. The gold market is subject to speculation and volatility as are other markets. Compared to other precious metals used for investment, gold has been the most effective safe haven across a number of countries.

This glossary of numismatics is a list of definitions of terms and concepts relevant to numismatics and coin collecting, as well as sub-fields and related disciplines, with concise explanations for the beginner or professional.

<span class="mw-page-title-main">Palladium coin</span>

Palladium coins are a form of coinage made out of the rare silver-white transition metal palladium. Palladium is assigned the code XPD by ISO 4217. The first palladium coins were produced in 1966.

<span class="mw-page-title-main">Silver as an investment</span> Precious metal as a store of value

Silver may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4,000 years, although it lost its role as legal tender in developed countries when the use of the silver standard came to an end in 1935. Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. In 2009, the main demand for silver was for: industrial applications (40%), jewellery, bullion coins and exchange-traded products. In 2011, the global silver reserves amounted to 530,000 tonnes.

A self-directed individual retirement account is an individual retirement account (IRA) which allows alternative investments for retirement savings. Some examples of these alternative investments are real estate, private mortgages, private company stock, oil and gas limited partnerships, precious metals, digital assets, horses and livestock, and intellectual property. The increased investment options available in self-directed IRAs prompted the SEC to issue a public notice in 2011 due an increased risk of fraud in alternative assets.

The Canadian Platinum Maple Leaf is the official bullion platinum coin of Canada. First issued by the Royal Canadian Mint in 1988, it was available until 2002 in five different denominations, all of which are marked as containing .9995 pure platinum. The bullion coin was partly reintroduced in 2009 in the form of the 1 troy ounce denomination in .9999 purity, featuring a new portrait of Queen Elizabeth II on the obverse. The coins have legal tender status in Canada, but as is often the case with bullion coins, the face values of these coins is lower than the market price of the material they are made from.

<span class="mw-page-title-main">Euro gold and silver commemorative coins (Cyprus)</span>

Euro gold and silver commemorative coins are special euro coins minted and issued by member states of the Eurozone, mainly in gold and silver, although other precious metals are also used in rare occasions. Cyprus introduced the euro (€) on 1 January 2008. In 2000, in such a short time, the Central Bank of Cyprus has produced the first commemorative euro coin in silver. In 2010 the Central Bank of Cyprus has produced 2 more commemorative euro coin in gold and silver.

<span class="mw-page-title-main">Euro gold and silver commemorative coins (Slovenia)</span>

Euro gold and silver commemorative coins are special euro coins minted and issued by member states of the Eurozone, mainly in gold and silver, although other precious metals are also used in rare occasions. Slovenia introduced the euro (€) on 1 January 2007. Since then, the Bank of Slovenia have been issuing both normal issues of Slovenian euro coins, which are intended for circulation, and commemorative euro coins in gold and silver.

<span class="mw-page-title-main">Euro gold and silver commemorative coins (Slovakia)</span>

Euro gold and silver commemorative coins are special euro coins minted and issued by member states of the Eurozone, mainly in gold and silver, although other precious metals are also used on rare occasions. Slovakia is scheduled to introduced the euro (€) on 1 January 2009. The National Bank of Slovakia, together with the Kremnica Mint, will be issuing both normal issues of Slovak euro coins, which are intended for circulation, and commemorative euro coins in gold and silver. These special coins have a legal tender only in Slovakia, unlike the normal issues of the Slovak euro coins, which have a legal tender in every country of the Eurozone. This means that the commemorative coins made of gold and silver cannot be used as money in other countries. Furthermore, as their bullion value generally vastly exceeds their face value, these coins are not intended to be used as means of payment at all—although it remains possible. For this reason, they are usually named Collectors' coins.

<span class="mw-page-title-main">Fiat money</span> Currency not backed by any commodity

Fiat money is a type of currency that is not backed by a precious metal, such as gold or silver, or backed by any other tangible asset or commodity. Fiat currency is typically designated by the issuing government to be legal tender, and is authorized by government regulation. Since the end of the Bretton Woods system in 1971, the major currencies in the world are fiat money.

<span class="mw-page-title-main">The Great Debasement</span> 16th-century English currency policy

The Great Debasement (1544–1551) was a currency debasement policy introduced in 1544 England under the order of Henry VIII which saw the amount of precious metal in gold and silver coins reduced and in some cases replaced entirely with cheaper base metals such as copper. Overspending by Henry VIII to pay for his lavish lifestyle and to fund foreign wars with France and Scotland are cited as reasons for the policy's introduction. The main aim of the policy was to increase revenue for the Crown at the cost of taxpayers through savings in currency production with less bullion being required to mint new coins. During debasement gold standards dropped from the previous standard of 23 karat to as low as 20 karat while silver was reduced from 92.5% sterling silver to just 25%. Revoked in 1551 by Edward VI, the policy's economic effects continued for many years until 1560 when all debased currency was removed from circulation.

<span class="mw-page-title-main">Gold coin</span> Coin made from gold

A gold coin is a coin that is made mostly or entirely of gold. Most gold coins minted since 1800 are 90–92% gold (22‑karat), while most of today's gold bullion coins are pure gold, such as the Britannia, Canadian Maple Leaf, and American Buffalo. Alloyed gold coins, like the American Gold Eagle and South African Krugerrand, are typically 91.7% gold by weight, with the remainder being silver and copper.

A gold IRA or precious metals IRA is an Individual Retirement Account in which physical gold or other approved precious metals are held in custody for the benefit of the IRA account owner. It functions the same as a regular IRA, only instead of holding paper assets, it holds physical bullion coins or bars. Precious metals IRAs are usually self-directed IRAs, a type of IRA where the custodian allows more diverse investments to be held in the account.

<span class="mw-page-title-main">Vienna Philharmonic (coin)</span>

The Vienna Philharmonic, often shortened to Philharmonic, is a bullion coin of gold, silver, or platinum produced by the Austrian Mint. The coin is named for the Vienna Philharmonic orchestra, which inspired the design of both sides. It was introduced in 1989 as a one-troy ounce (ozt), gold coin with a face value of 2,000 Austrian schillings. It is generally one of the world's best selling bullion coins. In 2002, with the adoption of the euro currency, the nominal value of the one-ounce coin was changed to 100 euros. In 2008, the Mint introduced a one-ounce silver version of the coin with a nominal value of 1.50 euros. The silver coin is also one of the top selling bullion coins, ranked third in 2013. In 2016, the mint introduced a one ounce platinum coin with a face value of 100 euros.

References

  1. "Precious Metal Taxes".
  2. "US and Canada Tax Summary". MintedMarket.
  3. "Sound Money Index: Gold & Silver Laws".
  4. FINLEX - Translations of Finnish acts and decrees: 1501/1993 English
  5. ZilverGoudWinkel.nl FAQ: How about VAT?