Investment gold, as such, is exempt from Value Added Tax (VAT) in the European Union, although not in other countries such as Russia. However, investors interested in this metal must know that they have to pay taxes for the capital gains that the sale of it may bring them. These are the keys to the taxation that affects investment in gold.
We begin the month of April, and in addition to spring and the change in the summertime, the time of Income statement arrived a few days ago. For this reason, this week’s post is dedicated to the taxation of investment gold.
The first thing to define is the concept of investment gold and the qualities that, according to current legislation, it must meet to be considered as such.
In the Ninth Annex of Law 37/1992, of December 28, on Value Added Tax, it is established that “investment gold for this Law will be considered gold ingots or sheets of law equal to or greater than 995 thousandths and that conform to any of the following weights in the form accepted by the bullion markets.
The Annex includes a list of the weights accepted for investment gold bars ranging from 12.5 kilos and various sizes in grams, troy ounces, tael, and tolas.
The Law considers bullion with a pure gold content between 350 and 430 ounces (10.88-13.37 kilos) acceptable in the case of bank bullion. For the rest of the measures, all those ingots whose real weights do not differ from those established in the list of the Annex by more than 2% are authorized.
Coins that meet the following requirements are also considered investment gold:
• That they are of law equal to or greater than 900 thousandths.
• They were minted after the year 1800.
• That are or have been legal tender in their country of origin.
• That they are usually marketed for a price not higher than 80% of the market value of the gold contained in them.
For these purposes, the Official Journal of the European Union publishes, before December 1 of each year, the list of the coins considered as investment gold for the following and successive years.
Suppose the bars or coins do not meet the characteristics specified in the Annex to the Law. In that case, the VAT rate applicable to this ‘non-investment’ gold will be 21%, which is also applied to transactions with silver bars and coins, a metal that does not enjoy the same tax exemption as investment gold.