Over-the-Counter Cash Transaction

An over-the-counter cash transaction refers to the anonymous purchase or sale of precious metals (gold, silver, platinum, palladium) against cash, without the dealer recording the customer's identity. The term derives from the fact that the transaction is conducted literally "across the counter" – at the shop desk. For many investors, over-the-counter cash transactions were for decades the preferred method of acquiring physical precious metals discreetly. Since the tightening of Germany's Anti-Money Laundering Act (GwG), however, the scope for complete anonymity has been substantially curtailed.

Legal Basis: Cash Limits and Identification Requirements

The Anti-Money Laundering Act (GwG) requires precious metal dealers to verify the identity of their customers above certain transaction thresholds (identity verification). The relevant threshold values have been progressively lowered in recent years:

*EU Regulation 2024/1624 introduces a general cash payment ceiling of EUR 10,000 – this does not replace the German GwG identification requirement from EUR 2,000, which continues to apply in parallel.

Important: For the precious metals trade in Germany, a particularly low identification threshold of EUR 2,000 has applied since September 2020. From this amount onwards – whether in a single transaction or in several transactions that are recognisably linked – the dealer must verify and document the buyer's identity. A genuinely anonymous over-the-counter transaction is therefore no longer practically possible for larger amounts.

Identification typically captures the following data:

1. Full name
2. Date and place of birth
3. Residential address
4. Type and number of identity document (national ID card or passport)

Tax Dimension

Over-the-counter cash transactions have a second dimension under tax law. Gains from the sale of physical precious metal are taxable as a private disposal transaction under § 23 EStG, provided that less than one year has elapsed between purchase and sale (speculative holding period). After the one-year period has expired, gains are generally tax-free for private individuals.

The anonymity of the original purchase may make it harder to document the acquisition date and price – but this does not exempt the seller from the obligation to declare gains for tax purposes. In the event of a tax audit or enquiry from the tax authority, missing documentation may result in estimated assessments. Anyone wishing to use the current gold price as the purchase basis should therefore always retain proof of purchase.

Note: This article does not constitute tax or legal advice. For tax questions relating to precious metal purchases, please consult a qualified tax adviser.

Practical Procedure Today

In practice, a precious metal purchase at a reputable dealer today works as follows:

• Below EUR 2,000: Cash payment without identity verification is possible (over-the-counter transaction in the traditional sense).
• From EUR 2,000: Identity document required; documentation by the dealer (§ 10 para. 6a GwG).
• In case of suspected money laundering: Reporting obligation to the Financial Intelligence Unit (FIU) – regardless of the amount (§ 43 GwG).

Dealers who violate GwG obligations risk fines of up to EUR 150,000. Buyers who deliberately split transactions to remain below the identification threshold ("smurfing" / structuring) circumvent the dealer's due diligence obligations and may, depending on the circumstances, be liable under § 261 StGB (money laundering) if the funds originate from a predicate offence.

Over-the-Counter vs. Online Purchase

You can determine the currently achievable buying price in advance using our calculator – so you walk into any selling conversation well prepared.

Key Takeaway

Over-the-counter cash transactions in Germany allow anonymous cash payments for precious metal purchases only up to EUR 2,000; above this amount, an identity check is legally mandatory. Anyone buying or selling physical investment gold or silver should always retain proof of purchase in order to be able to demonstrate the date and price of acquisition for tax purposes.