Regarding how we should record investment gold in the income statement, the first thing to do is explain what conditions the precious metal must meet to be considered within this category.
The Ninth Annex of Law 37/1992, of December 28, on Value Added Tax determines that “investment gold for the purposes of this Law will be considered gold ingots or sheets of law equal to or greater than 995 thousandths and that conform to any of the following weights as accepted by the bullion markets .
Said legal document contains a list of the weights of investment gold bars, which ranges from 12.5 kilos (banked gold, 400 ounces in weight, which is what central banks usually use) and smaller sizes.
The weight of these bars is expressed in troy ounces (the usual measure of precious metals, which is equivalent to 31.10 grams ); tael (measure used in East Asia, equivalent to 40 grams ); and tolas (used in India and equaling 11.64 grams ).
According to the aforementioned Law, all those ingots whose pure gold content ranges between 350 and 430 ounces (10.88-13.37 kilos) are considered investment gold , in the case of bank ingots.
In the smaller ones, investment gold is considered to be those whose real weights do not differ by more than 2% from those established in the list in the Annex.
Coins
As for investment or bullion coins , they also have to meet a series of requirements to be considered as investment gold.
These requirements are the following:
• That the coins are of a law equal to or greater than 900 thousandths .
• They have been minted after the year 1800 .
• That are or have been legal tender in their country of origin.
• That they are marketed regularly for a price not exceeding 80% of the market value of the gold they contain.
To clarify which investment coins are included in this classification, the Official Journal of the European Union publishes , before December 1 of each year, the list of coins considered as investment gold for the following year.
Investment gold, without VAT
The fact of determining which gold is considered investment and which is outside this category is due to the fact that investment gold, as established in Law 37/1992, of December 28 , is exempt from Value Added Tax ( VAT) .
Gold that does not fall into this category, because it does not meet the conditions established in the annex to the law, is taxed with 21% in said tax. This rate also applies to transactions made with silver bullion and coins, a precious metal that does not enjoy the same tax exemption as investment gold, nor does platinum or palladium.
Therefore, investment gold is considered by the Tax Agency within a special tax regime , in which it enjoys exemption from Value Added Tax.
Logically, this fact constitutes a notable advantage of gold over other metals when it comes to investing, since a rise in the price of the metal above the premium paid for the piece (ingot or coin) will mean a profit for the investor, while in the case of silver or platinum, the increase would have to exceed that 21% to start obtaining profitability.
Investment Gold Taxation
Once the client has sold the investment gold and has obtained a capital gain or capital gain, said gain is subject to income tax , within the tax base of savings .
The amount of the tax is established in sections, depending on the amount of this tax base. Thus, in the 2019 Income , the sections are the following:
• Up to 6,000 euros, 19% .
• From 6,000.01 euros to 50,000 euros: 21% .
• From 50,000.01 euros onwards: 23% .
Finally, and in the event that the investor keeps the investment gold in his possession and does not carry out any operation with it, it is not necessary to include it in the declaration, since it is not subject to tax.
