Precious Metal Taxes
Understanding Canadian Tax Laws for Precious Metals
Investing in precious metals is a smart move, but it’s important to understand the tax implications. In Canada, how you’re taxed depends on what you buy and how you plan to use it. Here’s a breakdown.
What's Taxed and What's Not?
Some good news: when you buy investment-grade bullion like gold, silver, platinum, or palladium bars or coins from a reputable dealer, like here at Royal Bull, you won’t pay Goods and Services Tax (GST) or Harmonized Sales Tax (HST). However, if you’re into numismatic coins – those collectible ones with history or rarity – they might be subject to GST/HST.
GST/HST Considerations
The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are federal taxes in Canada applied to most goods and services. GST is a 5% tax levied by the federal government, while HST is a combined tax that includes both the federal GST and a provincial sales tax component, varying by province. Understanding these taxes is crucial for navigating the purchase and sale of precious metals within Canada.
Bullion vs. Numismatic Coins: Generally, investment-grade bullion, such as gold, silver, platinum, and palladium bars or coins are exempt from Goods and Services Tax (GST) or Harmonized Sales Tax (HST) when purchased from a reputable dealer.
Numismatic Coins: Collectible or numismatic coins may be subject to GST/HST, as they are often considered to have a higher premium due to their rarity, historical significance, or artistic value.
Capital Gains Tax: What You Need to Know
Here’s more good news: if you sell your precious metals bullion for a profit, you won’t have to pay capital gains tax. But remember, you still need to keep track of your purchases and sales for tax reporting.
Stay on the Right Side of Reporting
If you’ve got precious metals stashed away outside Canada, and the total cost is above certain limits, you need to let the taxman know. Plus, if you’re earning money from activities like mining or trading metals, you might owe some income tax.
When in Doubt, Get Advice
Tax laws can be tricky, and they can change. To make sure you’re doing everything by the book and maybe even saving some money, talk to a tax advisor who knows about precious metals. They’ll help you understand the rules and make the best choices for your situation.
At Royal Bull, we’re here to help you make informed decisions about your precious metals investments. While we aim to provide accurate and up-to-date information, remember, tax laws can change and everyone’s situation is different. For personalized advice, it’s best to talk to a tax pro.
