Taxes on gold

Summary

• Depending on its form, gold is taxed by VAT, import tax and wealth tax.

• Jewellery and articles of daily use made of gold or gold alloys are subject to VAT and import tax, but generally not to wealth tax.

• Banking gold and gold coins are mostly exempt from VAT and import tax, but are subject to wealth tax.

• Gold bars and gold Vreneli must be declared in the tax return.

Not all gold is the same, at least as far as taxes are concerned. Jewellery, raw gold and scrap gold are taxed differently than investment gold/bank gold. The most obvious tax is probably value added tax, which is related to import tax, which has to be paid when importing goods into Switzerland. The third tax in the group is wealth tax, which only has to be paid by wealthier people, but has consequences for all Swiss residents when filing their tax returns.

Note: This article is intended as a first orientation on the subject of taxes on gold in Switzerland and in no way replaces the advice of a tax lawyer, trustee or Swiss customs. For binding information, please contact Swiss Customs or the Department of Finance.

VAT on gold

If you look at the receipt when you buy jewellery, you will see that VAT is listed there. VAT is charged on jewellery just like on all other goods.

There are only very few goods and services that are exempt from VAT, one of them being bank gold. Since bank gold is also exempt from VAT in all surrounding countries, it was also exempted from VAT in Switzerland by the Federal Council through the VAT Ordinance (VAT Ordinance Art. 44). The Federal Council did this to prevent distortion of competition and, in the worst case, smuggling between the EU and Switzerland.

The very narrow definition of bank gold should be noted. This comes from the Precious Metals Control Act and the Precious Metals Control Ordinance. Thus, bank gold is defined as ingots cast or stamped with a fineness of at least 995 and the stamp of a recognised assayer or smelter. The list of recognised smelters and assayers can be obtained from the Federal Office for Customs and Border Security.

Gold coins minted by the state do not count as bank gold, but they too are exempt from VAT under Article 44 of the Ordinance on the Value Added Tax. Examples are the Krugerrand, the Vienna Philharmonic, the gold Vreneli and some more.

Fortunately, since the VAT is levied by the dealer, the end customer hardly has to deal with the basics of it.

Import tax on gold

Import tax is the sister of VAT, it regulates the duties that have to be paid to the state for the import of goods. The legal basis is the same. However, this tax has a greater impact on private investors because they can import gold from abroad themselves.

Gold bars and gold coins are taxed differently than jewellery © PreMeSec Ltd liab Co

Since gold jewellery is subject to the VAT, it must also be declared when it is imported into Switzerland, provided it is jewellery with a value above the exemption limits and not jewellery that was purchased in Switzerland.

State-minted gold coins and bank gold are not subject to import tax and can be imported without paying tax. It is important to note that not all gold that is tax-free abroad also falls into this category in Switzerland. For example, restrikes of historical coins, even if they are former state coins, are subject to VAT in Switzerland. Austrian ducats and crowns produced and sold by the Austrian Mint are subject to VAT and import tax in Switzerland.

Obligation to declare when importing gold into Switzerland

investment gold and bank gold, which is exempt from import tax, can be imported/exported to Switzerland without any limits. However, in the event of a control, information must be provided on the quantity and origin. In case of doubt, it is advisable to obtain information from Swiss customs before entering the country.

Wealth tax on gold

Wealth tax in Switzerland is rather exotic in international comparison; only a few countries in Europe have a wealth tax. It also only affects people who are resident in Switzerland; assets of people who are not resident in Switzerland are not affected by wealth tax. Wealth tax is levied at the municipal and cantonal level, but not at the federal level. Since the cantons have tax sovereignty on their territory, wealth taxes and tax allowances vary widely. Despite the different taxation, however, this means that all assets and thus also precious metals must be declared in the tax return.

Now the question arises for most taxpayers as to the value at which the precious metals must be declared. It is the value on 31 December of each tax year; the Federal Tax Administration provides the tax values in the price lists. It is advisable to use the advanced search and enter "coins and precious metals" as the title group.

It is also possible to search for the value using the valor number.

Jewellery within the scope of normal use does not have to be declared for wealth tax purposes. In case of doubt, a specialist or the tax authorities should be contacted.

Sell and buy your precious metal bars on PreMeSec.ch too!

Frequently asked questions about taxes on gold

Do I have to declare my gold Vreneli in my tax return?

• Yes, you have to declare all your assets in your tax return, including precious metals and therefore also gold Vreneli.

Do I have to declare gold jewellery in my tax return?

• Yes and no. In general, jewellery that is considered to be an ordinary article of daily use does not have to be declared individually. If the value of the jewellery exceeds the usual scope, it must be declared. In case of doubt, one should consult an expert or the tax authorities.

Does gold have to be declared in the tax return?

• Bank gold and gold coins are part of your assets and must therefore be declared. If in doubt, consult an expert or the tax authorities.

Do I have to declare gold when importing it into Switzerland?

• Gold that is subject to VAT, such as jewellery, watches or replicas of historical coins, must be declared and the import tax paid. Bank gold that is not subject to VAT does not have to be declared. However, if you are asked by border officials about the goods you are carrying, bank gold must also be declared correctly. It is also important to note that in many countries, including the EU, the export of bank gold above a certain value must be declared. Final binding information on this can be obtained from Swiss customs or the customs of the exporting country.