In the latest Capital Account, the lovely Lauren Lyster asks David Selig, Federal Tax Practitioner for Selig & Associates, if U.S. citizens with overseas holdings of gold and other precious metals will be the next targets of IRS scrutiny? Our guest, David Selig, has concerns about the growing government attention being paid to the laws governing barter and how this may matter to owners of gold and silver. Tax professional David Selig walks us through the issues, starting with the barter laws on the books.
Lauren Lyster & David Selig Discuss Precious Metals Barter Tax & IRS Targeting Gold Investors
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They are afraid of people keeping gold and silver collection…
When precious metals get into South Africa they add 10% and charge us 14% VAT (Value Added Tax) on that amount. What is the situation in your country?
In our country, everything goes up except silver. It’s the same as it was in February of 2011. Darn that dollar is looking good!
We have no VAT, but we do have a tax on about everything a statist can dream up.
Cheers!
In Canada, metals that are 99% pure aren’t taxable. So, precious metals don’t have any taxes as long as they are 99% pure. To be more precise, it’s actually all commodities that have no taxes so in Canada, 99% pure metals are considered as commodities.
@Conax lol Let me rather not bring the other taxes into the equation… I’ve heard they’re working on a Fart Tax as well, they’re just having challenges measuring it. lol They might tax it according to the quantity of onions and eggs bought.
In Germany (and the EU for thet matter) there is no VAT on gold. On silver you pay 19% on bars and 7% on coins (thats why you can buy these cylinder-shaped bars here- they sell as coins. coins go as art-items for now, thus only 7%). However the EU wants Germany to syncronize the VAT and already threatens penalties, so for some weeks now folks thought VAT for coins would go up already in january. After retailers protested with the argument they wouldn`t be able to tweak their computer systems that fast, (for they would use another law then only charging VAT for the differnce between spot and retail price if I got that right) the hole thing seems to be getting postponed for another year or so.
If you sell your PM you don`t pay any taxes after one year in your posession.
@skeleton Thanks. Interesting info. It seems like the long and short of it is that they’re screwing us over across the globe although in some places less than in others. Maybe this is not the place to ask, but where can I get info on silver bullion products manufactured in Germany? Do you perhaps know of a reliable dealer that ships internationally?
Well Germany doesn`t have anything of prominence like the eagle, only those “memorial coins” (10 Euro silver), now with silver content stripped down to 625/1000.. There may be other coins but I´m no numismatic guy at all and stick to maples mostly.
Then there is Degussa, issuing their own bars (very traditional company, and infamous for their working with the nazis- who just begin expanding as bullion dealer big time again with a new owner family.)
Here is one big price comparison site, maybe helps with google translate: http://www.gold.de
I´m only buying at one local store now, so I can`t be of any help regarding anyone doing international shipping.. maybe check the degussa site.. But wouldn`t you have to pay double VAT if you order bullion into SA?
@skeleton Thanks for the info. Nope, it will only be the amount plus 10% times the 14% VAT… the rest will depend on whether I am a dealer and VAT registered or not.
In this video the tax expert mentions that the IRS is looking into taxing capital gains of barter. <a href="mailto:Sh@t“>sh*t like this really pisses me off. How about the IRS allow us to write off on our taxes the value of my losses from having to use Federal Reserve Notes and the rising cost of everday items due to inflation. It reminds me of them taking taxes from your paycheck all year long and not giving you any interest on your refund if you receive one. If you are one day late paying them you owe interest and penelties. I wish to send a message here about how if they get involved in our lives to this point, we must ALL fight back.
Amen!
In the UK, consumers pay 20% VAT on both silver bars and coins… no VAT on any kind of gold. But they pay capital gains tax (CGT) on bars if they make a profit above £10,100. So far in the UK, this CGT assumes conversion into currency before a purchase of goods. On IRS, typical of the big state to try to get in on the barter economy… would anyone record their transactions while struggling in hyperinflationary conditions? I don’t think so.
Why should underpaying for a good be a ‘tax event’ anyway? Surely the IRS’s idea is to tax the appreciation in the gold/silver in the purchase itself.
In China (mainland), we have 17% VAT for goods, but just charge seller’s side. But for gold and sliver, I calculated… there is no VAT or any other taxes, exactly follows the international spot price.
Thanks. This is definitely more proof that the authorities in China are encouraging their citizens to save in money, namely gold and silver.
You mean it can literally be had for paper spot price? Surely there must be some margin (or large inland production shich seems to be the case). Be happy then, they’re basically giving some away!
So if you buy in China some physical gold and silver bars, you don’t pay any premiums over spot on these two metals. That’s awesome! If that’s the case, then China is the best place to buy physical gold and silver.
The U.S. taxes holdings like SLV & SIVR (ETF’s) at high rates similar to investing in painting like a Van Gogh. Tax rates even at the lowest brackets are near unrealistic.
About 3 years ago I made several trades using SLV and was of not aware of this tax per sale as I thought it would be considered a regular stock. Due to the way they calculated the taxes ignoring losses on trades, my entire profit went to pay for the year end taxes.
Since then I’ve never invested in any of these funds again.
It’s my concern that governments won’t confiscate the metals but just try to tax them into oblivion unless sold to a chain bank where you’d get preferential tax rates. This gets the metals back to the governments without needing to confiscate.
Land of the free my A**!
In the Netherlands gold is VAT free. Silver bars are considered commodity and have general VAT which now stands at 21%. Silver coins (possibly only government-issued ones, not rounds) have 21% VAT over the margin the dealer makes. How much exactly that is may by law not be on your receipt.
In Canada, there aren’t any taxes on commodities and pure metals so pure gold and silver are non-taxable. Also, there aren’t any taxes involved whenever people barter each other. So, I could get paid in silver and the government won’t be involved with it.
Sounds like heaven on earth. lol
@SilverBullion Not when the dictator Stephen Harper takes over the Canadian throne.
Although, I’ve read the comments above and most of the people have to pay taxes on pure gold and silver which it sucks. I don’t even know how they can tolerate like that. :/
@Sumkid; I was just kidding lol I know things need to be set right in Canada as well. In fact, it seems we need a revolution globally.
@SilverBullion We sure do! We can start a revolution buy simply buying physical gold and silver. The good part about it is that it is peaceful and the most effective method to fight against the system. Right now, there aren’t a lot of people doing it so it is still not considered as a revolution.
@Sumkid I am of the opinion that physical gold and silver ownership should only form part of the revolution and that it won’t be peaceful. This is why many of us are preppers… going for gold, silver, lead, food and other necessities. We should of course not exclude honorable brotherly love.
@SilverBullion Maybe you’re right because if everyone starts to buy physical gold and silver, then governments are going to make the ownerships of them illegal and people won’t be able to do anything about it by doing peaceful actions. We need guns to fight against them. But in Canada, if you want to own a gun, you need a license so that means the government will know about it.
@Sumkid Yes, they might make gold and silver ownership illegal and even if they don’t, we will need guns and other necessities to survive. In case they make gold and silver ownership illegal, it will almost certainly create a black market where we should be able to exchange our gold and/or silver for goods and services. The applies to other stuff as well, including guns. We will have to think outside the box.
@SilverBullion Yeah you’re right! I can get a gun from the black market so that the government won’t know about it. I can use Craigslist to find one. For the moment, I’ll focus on accumulating a lot of copper pennies so that I can exchange them for an ounce of gold. By doing that, I’ll get 50% off of the spot price!
@Sumkid I meant when the system goes haywire, you might be able to get guns and stuff from the black market. It is however not advisable to do it now . If you can, get a gun legally. Any other route is a route straight into prison and a lot of trouble at this stage.
@SilverBullion What if one day, the Canadian government decides to make gun ownership illegal so that I’ll be forced to give up my legally owned guns? If I don’t, then the government will be knocking at my door.
@Sumkid It will surely be up to you. lol There are more than one way to skin a cat. You will have to get creative.
@SilverBullion Yeah but I won’t think about that right now because the time still hasn’t come for me. I can own or even create a bow and arrows because they are legal to own and there isn’t any age restrictions. Even better! A crossbow because it has a trigger similar to guns and better than bows!
@Sumkid Now you’re getting creative. lol
@SilverBullion Thanks! I’ve just checked a local shop online called Canadian Tire and the most expensive crossbow cost 900$ plus tax and the less expensive for 800$ plus tax. That’s a lot! Check it out yourself with the link below:
http://www.canadiantire.ca/search/search_results.jsp;jsessionid=QLKF8w1nSh1X9TJnKtYGbl8z1Zg9tJFyrjpqBCJjXG2r16FVG1x1!1901246090?bmForm=form_endeca_search&bmFormID=1351289382307&bmUID=1351289382307&bmIsForm=true&bmPrevTemplate=%2FAST%2Fbrowse%2F5%2FSportsRec%2F1%2FHunting%2FArchery.jsp&bmHidden=OMNITURE_FROM&OMNITURE_FROM=Search&bmHidden=event26&event26=true&bmText=quick_search_term&quick_search_term=crossbow&bmSubmit=quick_search&quick_search=&bmHidden=FOLDER%3C%3Efolder_id&FOLDER%3C%3Efolder_id=1408474396672320
@Sumkid You’re welcome. Get a second hand one for $225 here: http://www.adpost.com/ca/sports_games/Archery/
@SilverBullion I’ve checked the location and it is way too far. The dealer doesn’t want to ship it. I guess I’ll stick with Canadian Tire for the moment until I find another one that is closer and cheaper.
@Sumkid Yeah, keep looking. I am sure you will find a second hand one at a good price.
@SilverBullion Expensive or not, I’m glad that at least the crossbow ownership is legal here in Canada without a license. At least with Canadian Tire, you have a one year guarantee with them and the quality of them is assured.
@Sumkid Right on.
@SilverBullion Yup! 8D