Taxation of investment gold transactions, Photo: magnificInvestment gold and other precious metals can be a form of capital investment. However, transactions involving them have specific tax implications in Ukraine.This is explained by Danylo Vinnik, a lawyer at Private Law Firm “Prykhodko and Partners”, in a commentary to “Telekanal 24”.
What nuances should investors be aware of
The acquisition of gold or silver does not generate income for an individual, thus it is not subject to personal income tax (PDT) or the military levy. However, there is a significant difference regarding VAT.The supply of investment gold, including high-purity bars and gold coins specified by law, is exempt from the payment of such tax.Conversely, for silver, there is no similar general exemption, so VAT is typically already included in its cost, making the initial threshold for an investor to achieve a profit higher.Read also
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On the other hand, the situation is more favorable during sales. The income of an individual from the sale of precious metals purchased from a bank is not included in taxable income (subparagraph 165.1.51 of the Tax Code).Therefore, such a transaction is not a basis for calculating PDT and the military levy, and this applies to both bank metals with physical delivery and without it.However, it is essential to retain the relevant documents, as the sale of jewelry and scrap metal may be subject to a different tax regime.
When taxes will still have to be paid
Interest on deposits in precious metals is a separate type of income.It is subject to personal income tax at a rate of 18% and a military levy at a rate of 5%, and a Ukrainian bank typically acts as the tax agent itself.At the same time, for ETFs, fund shares, and other securities, the rules for taxing investment profit apply – the positive difference between the proceeds from the sale and the documented expenses for acquisition.Based on materials from: Telekanal 24# TaxesPlace for your advertisement