Singapore’s Tax Policies on Investment Precious Metals and Bullion
21 October 2024
As an increasingly prominent global hub for precious metals, Singapore offers a unique and attractive tax environment for international investors looking to buy and store bullion. With its strategic location, robust regulatory framework, and favorable tax policies, Singapore has established itself as a destination for investment-grade gold, silver, and platinum.
Understanding the nuances of Singapore's tax policies, particularly the Goods and Services Tax (GST) exemptions for Investment Precious Metals (IPM), is crucial for savvy investors seeking to optimize their holdings.
In this article, we review the key aspects of Singapore's tax framework on investment precious metals and bullion, to help international investors make informed decisions regarding buying and storing gold, silver, and platinum in Singapore.
Sales Tax in Singapore
In Singapore, the Goods and Services Tax (GST) functions similarly to what international investors might know as sales tax or Value-Added Tax (VAT). It is a broad-based consumption tax levied on most goods and services. As of now, the GST rate in Singapore is 9%.
The GST has seen incremental increases in recent years, reflecting the government’s need to boost revenue for social spending, healthcare, and infrastructure. Historically, the GST stood at 7% for over a decade. However, in 2023, the government implemented the first of two planned increases, raising the GST rate to 8%, with a further increase to 9% set for 2024.
Looking ahead, Singapore’s GST will eventually rise to 10%, following a gradual approach aimed at balancing economic growth with rising public spending needs.
Why Singapore Removed GST From Investment Precious Metals?
Singapore removed the Goods and Services Tax (GST) on Investment Precious Metals (IPM) in October 2012 to enhance its position as a global bullion trading hub. One of the key reasons for this change was the recognition that IPM, such as gold, silver, and platinum, are essentially financial assets, much like stocks, bonds, and other financial instruments, which are typically GST-exempt. Prior to the exemption, the inclusion of GST on IPM created an uneven playing field, as other actively traded financial assets were not subject to such taxes.
The removal of GST on IPM aligned Singapore’s tax policy with international practices, where major financial centers treat precious metals similarly to other investment vehicles. This move made it more attractive for investors to buy, sell, and store precious metals in Singapore without incurring its value-added tax.
This strategic move aligned with Singapore’s long-term vision to become a key hub for precious metals in Asia, drawing in international refineries, bullion banks, storage and secure logistics providers, bullion dealers, and investment funds. It reduced costs for investors and businesses alike, making Singapore a more competitive and cost-effective destination for the buying, selling, and vaulting of precious metals.
How is Investment Precious Metal Defined?
Not all precious metals are considered IPM. For example, conventional silver, platinum, or gold jewelry remains taxable. Bullion jewelry, created more for investment, is also not tax-free.
Numismatics and collectibles made out of precious metals continue to be subject to Singapore’s sales tax.
The Inland Revenue Authority of Singapore (IRAS) has determined the criteria for gold, silver, and platinum bullion to be considered Investment Precious Metal (IPM) and GST-exempt.
Singapore’s Investment Precious Metal Criteria for Bars, Wafers and Ingots
A precious metal bar, wafer, or ingot must satisfy all of the following criteria in order to qualify for GST exemption.
- It is gold of at least 99.5% purity, silver of at least 99.9% purity or platinum of at least 99% purity.
- It is capable of being traded on the international bullion market. A precious metal bar, ingot or wafer refined by a refiner with the following accreditation/ endorsement is regarded as meeting this criterion:
- For gold and silver, a refiner in the current or former ‘Good Delivery’ list of the London Bullion Market Association (LBMA),
- For platinum, a refiner in the current or former ‘Good Delivery’ list of the London Platinum & Palladium Market (LPPM); or
- A refiner that intends to be in the ‘Good Delivery’ list of the LBMA (for gold and silver) or LPPM (for platinum) and is endorsed by the Enterprise Singapore.
Precious metals produced by refiners with LBMA or LPPM accreditation are widely recognized by the industry as having the requisite quality to be traded on international bullion markets. They are also readily accepted for delivery on many international commodities exchanges. Hence, the two accreditations form the basis for the criterion of “capable of being traded on the international bullion market”.
- It bears a mark or characteristic that is internationally accepted as guaranteeing its quality.
An example of such a mark is the hallmark of a refiner in the ‘Good Delivery’ list of the LBMA/ LPPM stamped on the bar, ingot, or wafer. In addition to the hallmark of the refiner, some bars may also bear the name of specific banks (e.g. Credit Suisse, UBS, Commerzbank, Scotiabank). These bars are commonly known as bank-branded bars and if produced by LBMA or LPPM-accredited refiners, would qualify for GST exemption. - It is not a decorative bar, ingot, or wafer or a collector’s bar, ingot, or wafer.
Some examples of non-qualifying bars, ingots or wafers are:- Bars, ingots, or wafers with a hanger or hole (for wearing as a pendant)
- Odd-shaped bars, ingots, or wafers (e.g. boat shape, animal shape, heart-shaped)
Singapore’s Investment Precious Metal Criteria for Coins
A precious metal coin must satisfy all of the following criteria in order to qualify for GST exemption.
- IPM coin is exempt based on criteria similar to those for IPM bar, ingot and wafer. Coins that qualify for GST exemption must be gold of at least 99.5% purity, silver of at least 99.9% purity or platinum of at least 99% purity; and is or was a legal tender in its country of origin.
- To provide certainty to businesses, coins (excluding the proof, numismatic or collector’s version) that qualify as IPM are prescribed under the Fourth Schedule to the GST Act. They are:
- List of qualifying gold coins
- America Buffalo
- Australia Kangaroo Nugget
- Australia Lunar
- Austria Philharmonic
- Canada Maple Leaf
- China Panda
- Malaysia Kijang Emas
- Mexico Libertad
- Singapore Lion
- United Kingdom Britannia (United Kingdom Britannia gold coins minted from year 2013 onwards satisfy the minimum gold purity content of 99.5%)
- Canada Call of the Wild series
- United Kingdom Lunar
- United Kingdom The Queen's Beasts series
- Australia RAM Kangaroo
- Australia Dragon Rectangular
- United Kingdom Royal Arms
- United Kingdom Myths and Legends series
- United Kingdom The Royal Tudor Beasts series
- List of qualifying silver coins:
- America Eagle
- Australia Kookaburra
- Australia Koala
- Australia Lunar
- Austria Philharmonic
- Canada Maple Leaf
- China Panda
- Mexico Libertad
- United Kingdom Britannia (United Kingdom Britannia silver coins minted from year 2013 onwards satisfy the minimum silver purity content of 99.9%)
- Armenia Noah's Ark
- Australia Kangaroo
- Australia Saltwater Crocodile
- Canada Birds of Prey series
- Canada Wildlife series
- United Kingdom Lunar
- United Kingdom The Queen's Beasts series
- Australia Funnel-Web Spider
- Canada Superman™ S-Shield
- Canada Tree of Life
- South Africa Krugerrand
- Australia Dragon Rectangular
- United Kingdom Royal Arms
- Canada Creatures of the North series
- Canada Goose
- United Kingdom Myths and Legends series
- United Kingdom The Royal Tudor Beasts series
- List of qualifying platinum coins:
- America Eagle
- Australia Koala
- Australia Platypus
- Canada Maple Leaf
- Austria Philharmonic
- United Kingdom Britannia
- United Kingdom Lunar
- United Kingdom The Queen’s Beasts series
- Australia Kangaroo
- Australia Lunar
- United Kingdom Royal Arms
- South Africa Big Five series
- United Kingdom The Royal Tudor Beasts series
- List of qualifying gold coins
- Proof, numismatic and collector’s versions of coins in the prescribed list (e.g. Singapore Lion gold proof coins and Canada Call of the Wild gold proof coins) will not qualify as IPM and thus, are not exempt from GST. Proof, numismatic and collector’s coins are traded at prices largely determined by their rarity, finishing and beauty instead of the precious metals they contain. The importation and supply of such non-IPM coins are taxable.
Bullion coins that are not on the prescribed list do not qualify as Investment Precious Metals and will continue to be taxable.
Are Gold or Silver Rounds Taxable?
In Singapore, the tax treatment of gold and silver rounds depends on whether they meet the Investment Precious Metals (IPM) criteria under the GST exemption policy. To qualify as IPM and be GST-exempt, gold, silver, and platinum must meet minimum purity standards: 99.5% for gold, 99.9% for silver, and 99% for platinum.
Additionally, these metals must be traded in the form of bars, wafers, or ingots that are recognized by the international bullion markets. Rounds, which are coin-like in appearance but not legal tender, generally do not meet these standards and are therefore not considered IPM in Singapore.
Because gold and silver rounds do not qualify as IPM, they are subject to the prevailing Goods and Services Tax (GST) rate, which currently stands at 9% and is set to rise to 10%. This means that investors or collectors purchasing gold or silver rounds in Singapore will have to pay GST, unlike those investing in qualifying gold and silver bars or coins.
Is Palladium Tax-Exempted in Singapore?
No, palladium is not tax-exempt in Singapore. The Goods and Services Tax (GST) exemption for Investment Precious Metals (IPM) in Singapore applies only to gold, silver, and platinum, provided they meet specific purity and form requirements.
Palladium, despite being a precious metal, does not fall under the GST exemption policy. This means that palladium purchases in Singapore are subject to the prevailing GST rate, currently at 9%, and set to increase to 10% in the future.
Can Taxable Bullion Be Purchased Without GST?
There are ways to avoid paying GST on taxable bullion under specific circumstances.
One option is to store the bullion in a GST-exempt, bonded warehouse or vault, such as The Safe House in Singapore. If the bullion is stored within such a facility and never enters the domestic market, the purchase can be made without incurring GST.
The GST is only applied if the bullion is removed from the bonded warehouse and delivered into Singapore proper. By keeping the bullion in storage within these tax-exempt zones, investors can avoid paying GST, especially if the assets are intended for long-term storage or sale without entering the domestic market.
Buy and Store Precious Metals Tax-Free in Singapore
Singapore’s tax policies on Investment Precious Metals offer significant advantages for investors, particularly through the GST exemption on qualifying gold, silver, and platinum.
Besides being already a top global financial center, Singapore has positioned itself as a premier hub for bullion trading and storage in Asia. For those looking to capitalize on these tax benefits, it is important to understand which products qualify as IPM and how taxable bullion can be stored to avoid GST.
For investors seeking a reliable and cost-effective solution, The Safe House vault within The Reserve in Singapore provides secure, tax-free storage for precious metals. By leveraging the favorable tax environment and top-tier storage options like The Safe House, investors can optimize their precious metals strategy in a globally recognized wealth hub.