VAT, capital gains and the tax geography of European gold

The EU VAT Directive carves out a special scheme for what it calls investment gold: bars and wafers of a weight accepted by the bullion markets with a fineness of at least 995, and gold coins of at least 900 fineness minted after 1800 that have been or are legal tender in their country of origin and are sold at no more than 80% above their metal value. Supplies meeting that definition are exempt from VAT.

Silver, platinum and palladium have no equivalent carve-out. A silver bar therefore arrives with the standard rate of the country of supply attached — 19% in Germany, 20% in France, 20% in the UK — which is why the same nominal premium on silver is economically far heavier than on gold, and why differential-taxation coin schemes exist at all.

The practical consequence: a gold buyer compares premiums, a silver buyer compares premiums plus a tax wedge that can exceed the entire premium. Treat them as different asset classes for costing purposes, not two flavours of the same trade.

• Gold bars ≥995 fineness of market-accepted weight: VAT-exempt
• Gold coins ≥900 fineness, post-1800, legal tender, ≤80% over metal value: VAT-exempt
• Silver, platinum, palladium: standard rate of the country of supply
• Numismatic and collectible pieces above the 80% threshold: outside the exemption

Cross-border ordering is where buyers create problems for themselves. Metal shipped to you is a supply of goods taxed by destination rules; metal bought and left in a vault abroad may never cross a border at all, which changes both the VAT analysis and the reporting obligations that follow.

Vaulting in Switzerland or Singapore is popular precisely because storage of allocated metal in a bonded facility is outside EU VAT territory. That is a legitimate structure used by regulated operators, but it is not a tax escape: your residence still determines how any gain is taxed when you sell, and several jurisdictions require foreign asset reporting well below the value of a modest holding.

Germany exempts gains on physical gold held longer than twelve months under the private sale rules, which makes a buy-and-hold plan unusually efficient. Sell inside the year and the gain is taxed at your marginal income rate.

The United Kingdom taxes gains on bars and most coins as capital gains above the annual exempt amount, but gains on UK legal tender coins — Sovereigns and Britannias — are outside the charge entirely, a distinction worth more than any premium difference between them.

Switzerland levies no federal capital gains tax on private movable assets, Austria mirrors the German twelve-month logic for physical metal, and France applies either a flat rate on the gain or a tax on the sale proceeds where the acquisition cannot be documented — which is the strongest argument in this entire article for keeping invoices.

• Germany: exempt after 12 months' holding (private sales rules)
• United Kingdom: CGT applies; UK legal tender coins exempt
• Austria: 12-month logic broadly parallel to Germany
• Switzerland: no federal CGT on private movable property
• France: flat gain tax, or proceeds-based tax without documentation

Every favourable treatment above depends on evidence: an invoice with the bar serial, the date, the counterparty, and the price paid. Buyers who lose that paperwork lose the acquisition cost, and in several regimes an undocumented cost basis is treated as zero or triggers a proceeds-based charge.

Keep the dealer invoice, the storage statement showing continuous custody, and the sale confirmation. Store them outside the dealer's portal — accounts get closed, platforms get acquired, and a login is not a record.

Tax treatment reorders the dealer table more decisively than fees do. A German saver with a decade-long horizon should weight bar purity and clean invoicing above every other criterion, because the exemption is worth more than any plausible premium saving. A UK saver may rationally pay a higher premium for Sovereigns to sit outside CGT entirely.

None of this is advice on your position, and thresholds change with each budget. It is a framework for asking the right question of a local adviser rather than discovering the answer at the point of sale.

Two separate questions get answered as if they were one. Where the metal sits determines the VAT and import treatment of the transaction. Where you are tax-resident determines who taxes the gain when you sell. A Singapore vault does not make a German resident’s gain untaxed in Germany, and a domestic vault does not create a VAT charge on investment-grade gold that qualifies for exemption.

Getting this wrong in either direction is expensive. Investors have paid import VAT unnecessarily by repatriating metal they intended to keep vaulted, and others have assumed offshore storage removed a domestic reporting obligation that it did not touch.

• Vault jurisdiction: VAT, import duty, delivery mechanics
• Tax residence: income and capital gains treatment on disposal
• Platform domicile: reporting obligations and dispute forum

Metal held in a bonded warehouse or free-trade zone has not been imported for tax purposes. Nothing crystallises while it remains there and while ownership changes inside the zone. The taxable moment is withdrawal into the domestic market, and it is triggered by delivery — not by purchase, not by a change in the vault ledger.

This is why a platform’s delivery option deserves careful reading. The same holding can be entirely straightforward while vaulted and generate an import VAT bill on silver, or a customs declaration on gold, the day you ask for the bars.

Every jurisdiction that taxes gains on gold requires you to prove acquisition cost and holding period, and the holder — not the platform — carries that burden. Platforms fail, change ownership, and retire old statement archives. A contract note that exists only inside an account you may not be able to access in twelve years is not a record.

Export and store, locally, a per-transaction record: date, quantity in grams, fineness, price paid, all fees, currency, vault location and bar serials where allocated. Do it annually. It takes an hour and it is the difference between a straightforward disposal and an argument you cannot win.

• Date, grams, fineness and price paid on every purchase
• All fees separately — many jurisdictions allow them against the gain
• Vault location and bar serials for allocated holdings
• Annual statements exported and stored outside the platform

Thresholds, holding-period reliefs and exemption definitions change with national budgets, sometimes with months of notice and sometimes with none. Anything written on a website — including this page — is a starting map, not a current authority for your circumstances.

Use it to know which questions to ask, then confirm the answers against your national tax authority’s current guidance or an adviser before a transaction large enough to matter. The cost of one hour of professional advice is trivial against a mis-stated disposal.