Cash Limit for Gold Purchases
Also: Identification obligation, AML threshold, Over-the-counter limit, Cash limit precious metals
The cash limit for gold purchases sets the threshold above which dealers must verify and document the buyer\'s identity under anti-money laundering law.
Anyone who buys gold with cash encounters a legal obligation above a certain amount that surprises many buyers: the dealer is required to verify and document the identity of the customer. This so-called cash limit is not a purchase cap, but a due diligence obligation under anti-money laundering (AML) law. In Germany, a significantly lower threshold has applied to precious metal dealers since the beginning of 2020.
Legal Basis: the Money Laundering Act
The German Money Laundering Act (GwG) transposes EU directives on combating money laundering and terrorist financing into German law. Precious metal dealers – that is, commercial buyers and sellers of gold, silver, platinum, and palladium – are among the so-called obligated entities under § 2 GwG. They must fulfil general due diligence obligations for cash transactions above certain thresholds.
The central provision for gold purchases is § 10 para. 6a GwG: precious metal dealers must verify the identity of a buyer or seller as soon as a cash transaction reaches or exceeds €2,000 – or when multiple transactions are obviously related and collectively exceed this amount (structuring prohibition).
Until the end of 2019, this threshold stood at €10,000. The reduction to €2,000 came into force on 1 January 2020 and was based on the Act implementing the 5th EU Anti-Money Laundering Directive (published in the Federal Law Gazette on 19 December 2019).
What Exactly Happens at €2,000?
From the threshold, the dealer is obligated to establish the identity of the buyer. In practice this means:
- Present photographic ID: National identity card or passport (for foreign nationals, possibly with residence permit).
- Record data: Name, date of birth, address, type and number of the identity document.
- Retain documents: The dealer is required to store the records for at least five years.
- Suspicious activity report: If there are indications of money laundering, the dealer must file a report with the Financial Intelligence Unit (FIU).
| Purchase Amount (Cash) | Dealer's Obligation |
|---|---|
| Under €2,000 | No identification obligation (as a rule) |
| From €2,000 | Identification + documentation mandatory |
| From €2,000 (split, recognisably connected) | Identification still required (anti-structuring rule) |
| At any time if suspicious | Suspicious activity report to FIU regardless of amount |
Note: The €2,000 limit applies to cash payment. For bank transfers or debit/credit card payments, different due diligence levels apply; identity is typically already established through the payment method.
Over-the-Counter Transaction: the Anonymous Cash Transaction Below the Threshold
An over-the-counter cash transaction refers to an anonymous cash transaction conducted without a bank account. Below €2,000, such a transaction is theoretically possible anonymously with a reputable dealer – the dealer is not obligated to capture the buyer's identity.
In practice, many large precious metal dealers and banks have lowered the anonymity threshold further internally, or require identification from the very first euro, in order to minimise compliance risks. Buyers should therefore enquire with the respective dealer in advance.
What Does "Structuring" Mean and Why Is It Prohibited?
Anyone who splits a purchase of, say, €4,000 into two tranches of €1,999 each to fall below the threshold commits an evasion act (structuring). The GwG explicitly prohibits this: recognisably connected partial purchases are added together. Dealers who notice such patterns but still fail to identify the buyer risk fines of up to €150,000.
Formula: Threshold Check
Total amount of transaction(s) ≥ €2,000
→ Identification obligation applies
Individual purchase A (€1,500) + Individual purchase B (€700) = €2,200
→ If recognisably connected: obligation applies
Tax Aspects: No Connection with the Speculative Holding Period
The cash limit is an anti-money laundering regulation and has no direct influence on the tax treatment of gold purchases. Anyone who sells physical gold after a holding period of more than one year realises, in Germany under § 23 EStG, no taxable gain from a private disposal transaction – regardless of the purchase amount and regardless of whether an identification took place.
For an individual tax assessment of your gain, the tax estimator and consultation with a tax adviser are recommended. This glossary entry does not constitute tax or legal advice.
Obligations for Buyers: What Do Private Individuals Need to Know?
Buyers have no AML obligation of their own, but must present their identity document when legitimately requested by the dealer. If they refuse identification, the dealer is entitled to decline the transaction. The stored data is subject to data protection law (GDPR); the dealer may not use it for other purposes.
For the purchase of physical investment gold – that is, VAT-exempt gold bars and certain coins – the identification legally changes nothing regarding the purchase price. The buying price calculator can be used in advance to determine how much a dealer will pay for scrap gold.
In Brief
Above a cash amount of €2,000, precious metal dealers in Germany are legally required to verify the buyer's identity and document it for five years – knowing this means buyers are not surprised at their next gold purchase. The threshold is not a tax regulation but serves to prevent money laundering.