Institutions holding physical gold need to understand security, reporting and tax. Allocated physical gold — recorded against specific bars and stored in a professional vault — has particular characteristics in each area.
VAT and Sales Tax
In many jurisdictions, investment-grade gold is exempt from VAT or taxed at zero. For example:
- European Union: Investment gold is generally VAT-exempt under the EU’s special scheme for investment gold.
- United Arab Emirates: Investment gold meeting the purity conditions is generally zero-rated for VAT. Other rules may apply to other metals and to services such as storage (EONA’s storage fees carry 5% VAT).
- Singapore and Switzerland: Both have exemptions for investment gold; the treatment of silver differs between them.
Coins and jewellery are often treated differently. Rules change, so check the current position with an adviser.
Capital Gains Treatment Varies
Gold is taxed differently depending on the jurisdiction and the holder. In the U.S., gains on physical gold held by individuals are taxed as collectibles (up to 28%). In Germany, private individuals who hold gold for over one year are generally exempt, but companies are taxed differently.
For institutions, the holder’s own tax position matters most. Where the metal is stored does not by itself decide how the owner is taxed.
With EONA, all metal is stored with Loomis in Dubai. Zurich and Singapore are planned locations (coming soon) and are not currently available. EONA does not give tax advice.
Reporting Considerations
Unlike ETFs or derivatives, allocated gold is a physical asset, not a claim on an issuer. This can affect how it is treated in regulatory filings, for example:
- Solvency II (EU insurers): the treatment of gold depends on the specific rules and conditions.
- Basel III: bank capital rules treat some physically held gold favourably; these apply to banks only.
With EONA, holdings are recorded against specific bar serial numbers and separately from EONA’s own assets, and records are available to support reporting under IFRS and other standards.
Holding Through Trusts or Companies
Some owners hold assets through trusts or holding companies, for example for succession planning. The legal and tax consequences depend on the jurisdiction and structure, and need specialist advice.
EONA opens accounts for legal entities, including trusts and companies, subject to our verification checks. Legal title to the metal stays with the account holder.