Breaking News: No GST for investment-grade gold, precious metals

Posted by Vergel Villasoto on 18 Feb 2012

In the Singapore Budget Speech earlier today it was announced that to promote Singapore as a precious metals trading hub the 7% Goods and Services Tax on precious metals will be removed. See excerpt from the Budget 2012 speech:

"C.62. We will facilitate the development of gold trading, which can draw on Singapore's strengths as an international financial centre and trading hub, to meet strong demand for investment-grade gold in Asia.

C.63. Investment grade gold and other precious metals are essentially financial assets that are actively traded and are just like other financial instruments that do not attract GST. I will therefore exempt them from GST. This change brings our tax treatment of investment-grade gold and precious metals in line with the practices of many developed economies, like Australia, UK and Switzerland."

Additional information is provided from IRAS website:

"Investment-grade gold, silver and platinum (“precious metals”) are essentially financial assets that are actively traded, similar to financial instruments such as stocks and bonds that are currently exempt from GST. To facilitate the development of a new refining and trading cluster in Singapore, the import and supply of investment-grade precious metals will be exempt from GST as announced in Budget 2012.

In addition, measures will be introduced to ease the cash flow of qualifying refiners and local consolidators of precious metals in the payment of input GST on import and purchase of raw materials used in refining the precious metals into investment-grade form.

The change will take effect from 1 Oct 2012. Full implementation details on the new GST treatment of exempting investment-grade precious metals, including the corresponding input tax claims, will be finalised after consultation with the industry. IRAS will publish them by 1 Sep 2012.

Investment-grade gold (in the form of a bar, ingot, coin or wafer) must be in purity of 99.5% and above, with the following characteristics that differentiates it from gold in other forms such as jewellery:

(i) Capable of being traded on the international bullion market;
(ii) Bears a mark/ characteristic accepted as guaranteeing its quality; and
(iii) Trade at a price based on the spot price of the metal it contains.

Investment-grade silver and platinum must be in purity of 99.9% and above and 99% and above respectively, with the same characteristics as investment-grade gold."


What this means for you with respect to order type:

Local Orders: If you purchase bullion as a private individual - not a GST registered entity - you are still subject to GST until this law comes into effect. Private individuals will not be able to claim GST back from purchase of bullion, unless a special provision is enacted to allow this.

Export Orders: The export permit process will not change until this law is in effect. Once effective there should no longer be a need to issue export permits or return proof of export to be exempted from GST.

S.T.A.R. Storage Orders: For purchases in multiples of 500 oz. consider storing the bullion in the Singapore Freeport under S.T.A.R. Storage until the new law takes effect. Once the law is in place you can then take physical delivery in Singapore of the bullion without being subject to the 7% GST.

This law is scheduled for implementation on 1 October 2012.