Taxes on Gold for Swiss Residents
Taxes on gold in Switzerland at a glance
What taxes are levied on which precious metals?
If you live in Switzerland and wish to invest in gold or other precious metals, you will inevitably have to address the subject of taxation. You may have to pay VAT, income tax or wealth tax. Moreover, entering Switzerland with coins or bars can attract import duties. So when is gold taxable, and are there any exceptions?
Disclaimer: This article provides general guidance on the subject of taxes on gold in Switzerland. It is not intended to be a substitute for expert advice from an accountant or tax professional. You can also obtain definitive information from the Swiss customs or the Federal Tax Administration (ESTV).
Gold taxation in Switzerland
Many investors residing in Switzerland use gold investment to diversify into different asset classes and thus minimise their exposure to risk by expanding their portfolio. But is this element of their asset wealth taxable? This question is not easy to answer because it depends on what kind of gold it is. Different taxes apply to jewellery, scrap gold or raw gold, and investment gold is subject to other conditions.
In this section, we will go into more detail about the various types of taxes in Switzerland and explain their relevance as regards the purchase, possession and sale of precious metals. You can also read our article on gold and Switzerland to learn more about why this country is an optimal location for gold investment.
When you buy gold jewellery online or in a physical store, you will find the retailer charges VAT at the full rate on each item. From January 2024, Switzerland’s standard rate of VAT will be 8.1%, though until the end of 2023, the rate will remain at 7.7%. A reduced rate of 2.6% applies to certain foods and medicines, as well as printed matter such as books and newspapers. Accommodation qualifies for a special rate of 3.8%. All this means that Swiss VAT rates are significantly lower than the rates applied in other European countries or the EU states, where VAT levies can be as much as 17 to 25%.
The good news for precious metal investors is that the purchase of investment gold is VAT-exempt in Switzerland and throughout the EU – as set out in Article 44 of the VAT Ordinance (MWSTV). This means no sales tax will be added to the net retail price. However, to qualify for this concession, all investment or bank gold must meet precisely defined criteria, because not all gold coins are the same and restrictions also apply to gold bars. Learn more about this in the “Definition of investment gold” section further down this page.
However, anyone who buys white precious metals such as silver, platinum or palladium for investment purposes must still pay VAT on jewellery, coins or bullion bars. But if the purchased holding is subsequently stored in a duty-free warehouse, investment silver and investment products made from the two grey metals can then be purchased free of VAT. You can find out more about how this works in the section entitled “White precious metals in a bonded warehouse”.
In Switzerland, physical gold coins and gold bars, which fall under the category of investment gold (see below) and white precious metals, must be declared as assets on tax returns. Collector coins can also fall under this same category, because they may be subject to a wealth tax. The same applies to expensive pieces of jewellery that are not regarded as classic articles in normal daily use. So in general, you won’t have to declare a wedding ring or a gold watch on your tax return, whereas you would be expected to declare a diamond-studded gold necklace. If in doubt, you should ask your tax advisor or consult a jewellery expert.
There is no income tax on capital gains from sales in Switzerland – unless you qualify as a professional trader.
It is advisable to retain and archive your receipts and other acquisition documents in order to be able to prove the period of ownership between any purchase and subsequent sale. This also applies to coins and bullion bars made of gold or silver, and also to high-quality fine jewellery.
Compared to the standard European practice, Switzerland’s customary wealth tax could seem a trifle exotic. It applies to all high net worth individuals residing in Switzerland and is collected at cantonal and communal level. For this reason, both the annual allowances and the wealth tax itself vary from canton to canton. Taxes are levied according to your total assets, including precious metals. The value of any coins or bars is determined at the end of each calendar year based on the precious metal prices in force at that time. This information can be accessed via the Federal Tax Administration price lists for direct federal taxes.
Tip: Click on “Search security” and then select the “Advanced Search” facility. You will reach your goal faster if you select the “Security group” “Coins and Precious Metals” as the title group.
Definition of investment gold
Whether VAT is charged on purchases of gold bars or gold coins very much depends on the definition of investment gold. This is relatively easy to determine for gold bars. The Precious Metals Control Act stipulates that gold in the form of bars or flakes must have a purity of at least 995/1000 or 99.5%. In addition, such gold must also be stamped by a recognised assayer or smelter.
The criteria are much narrower for gold coins. Once again, the gold fineness is critical and must be a minimum of 900/1000. In addition, the coins must have been minted after 1800 – historical gold coins older than this do not fall under the category of bank gold in Switzerland or the EU, and are thus subject to VAT when purchased. Furthermore, these bullion or collector coins must be (or must have been) legal tender in the country of issue. Last but not least, the selling price of a coin must not exceed the current price of gold by more than 80%.
In most cases, you can recognise coins that can be used as official currency by their face value. However, there are some exceptions, including, for example, the popular Krugerrand bullion coin. Gold Krugerrands are always minted without a monetary face value. Nevertheless, the coin is still considered legal tender in South Africa, with the current price of gold used to determine its equivalent value.
Below you will find an overview of the most important one troy ounce gold coins, all of which are internationally recognised as investment or bank gold. You can also learn more about this topic in the article covering information on precious metal bars and coins.
|Country of origin
* No stamped face value. Legal tender in South Africa and valued according to the current gold rate
Taxes on gold imported into Switzerland
Private investors who want to import gold into Switzerland must expect to pay import taxes in certain circumstances. This tax is handled in a similar way to VAT, which is why almost the same regulations apply. So if you wish to import gold jewellery – provided it exceeds the exemption limit or unless it was originally bought in Switzerland – it must be registered when you cross the border.
On the other hand, investment gold that was bought during a stay abroad will not be taxed when you return to Switzerland. Here, too, you should carefully note the definition of investment gold (see above). A special feature also arises in the case of restrikes of historical coins. These include, for example, restrikes of the classic ducats and crowns produced by the Austrian Mint, as well as Centenario gold coins from the Mexican Mint. These are all bullion coins specially minted for the investment market rather than state-minted coins destined for circulation coin, and as such they are taxable.
The situation is different with genuine historical circulation coins (made after 1800) such as the Swiss 20-franc gold vreneli, a coin which was minted millions of times between 1897 and 1949. Like bank gold, such coins can be imported tax-free without limits. During any inspection, you may have to provide information about the amount and origin of your gold. If in doubt, you can always obtain advance information from the Swiss customs.
Find out more about this topic in our article on importing gold into Switzerland.
White precious metals in a bonded warehouse
So while most gold investment products are VAT-exempt when purchased, as mentioned, the same does not apply to white precious metals. Irrespective of their fineness and vintage, purchases of silver, platinum and palladium bars or coins are generally subject to VAT. At first glance, this makes silver in particular less attractive as an investment product. But there is a legal way to save VAT on white metals. If you do not take your goods away after buying them from a specialist retailer, but instead have them delivered straight to a duty-free warehouse for storage, then the VAT levy does not apply.
In our article on storing precious metals in duty-free warehouses, you can find out how to buy silver free of VAT.
Taxes on gold in Switzerland at a glance
- Depending on the type of gold purchased, as a Swiss resident you must pay tax on this precious metal.
- The standard taxes levied in Switzerland are value added tax, income tax, and wealth tax.
- Taxes may also be levied on imported gold. Note that this specifically includes restrikes of historical gold coins.
- Investment gold is VAT-exempt. But remember that all gold is not the same and the definition of bank gold is narrow.
- In contrast to gold itself, purchases of silver, platinum or palladium bullion goods are subject to VAT. However, when stored in a bonded warehouse, these products are then quite legally defined as VAT-exempt.