For institutions allocating significant capital to physical gold, tax exposure isn’t just a detail — it shapes the investment outcome. Understanding jurisdictional differences in VAT, capital gains, and import/export duties is essential when choosing where to buy, store, and eventually sell your gold.
VAT on Investment Gold: Mostly Exempt, But Not Always
Across the EU, investment-grade gold is generally VAT-exempt, provided it meets purity thresholds (e.g., 99.5%+ for bars). This makes Europe — especially countries like Germany and Switzerland — an attractive destination for institutional purchases.
However, silver, platinum, and palladium do not enjoy this exemption and are often taxed at standard VAT rates unless held through specific structures (e.g., margin schemes or bonded warehouses). In the UAE and Singapore, physical investment gold is also zero-rated for VAT, enhancing their role as tax-efficient vaulting hubs.
Capital Gains Tax: Depends on Who You Are — and Where You Are
- UK: Gold held as legal tender coins (e.g., Britannias) is exempt from CGT, but bars or non-UK coins may be taxable.
- US: Gold is treated as a collectible, with a 28% maximum federal capital gains tax — higher than standard equities.
- Germany: Private investors pay no CGT if gold is held for over one year, but corporates may be taxed differently.
- Switzerland, UAE, Singapore: No capital gains tax — a major reason why many institutions store offshore, even if domiciled elsewhere.
For institutions, local tax residency and structure (e.g., fund, trust, corporate) will define liability. Tax treaties can also affect withholding rates or repatriation taxes when metals are sold abroad and profits are returned.
Import Duties and Cross-Border Movement
Physical gold is generally duty-free when moved between approved vaults in tax-neutral zones. However, importing metals into jurisdictions like India or China triggers hefty import duties — often exceeding 10%. This can erode margins and complicate liquidity strategies.
Jurisdictions such as Dubai and Singapore facilitate seamless movement due to their role as global transit hubs with zero import duties on investment gold.
Storage Jurisdiction as a Strategic Choice
Institutions increasingly see vault location as a tax and regulatory decision, not just a logistical one. Storing gold in tax-neutral, politically stable environments like Switzerland, Singapore, or the UAE offers:
- No local taxation on holdings or appreciation
- Protection from home-country seizure or regulation
- Favorable customs environments for delivery/redemption
Platforms like Eona let investors choose and switch jurisdictions based on evolving legal or strategic needs — offering control that legacy banking platforms rarely match.
What about Eona?
While Eona doesn’t provide tax advice, our infrastructure supports cross-border efficiency. With storage in Dubai, Zurich, and Singapore, we offer the flexibility institutions need to align their holdings with favorable tax environments.