Speculative Holding Period

Anyone who buys physical gold, silver, platinum or other precious metals and sells them again after more than twelve months does not have to pay tax on the resulting gain in Germany. This rule stems from § 23 para. 1 no. 2 of the Income Tax Act (EStG) and makes the speculative holding period one of the most important tax advantages when purchasing investment gold and other physical precious metals.

Legal Basis: § 23 EStG

§ 23 EStG governs so-called private disposal transactions — that is, sales that take place in private assets outside of any commercial activity. The law distinguishes two categories:

For physical precious metals — bars, coins, granules — the one-year rule applies. It begins on the day of purchase and ends on the same calendar day of the following year. If the metal is sold before this period expires, the gain is taxable as other income under § 22 no. 2 EStG and is taxed at the personal income tax rate (up to 45% plus solidarity surcharge).

Note: This article is for general information purposes only and does not constitute tax or investment advice. For individual questions, please consult a tax adviser.

Calculation: When Does the Period Begin and End?

The period is calculated to the exact day. The decisive dates are the acquisition and disposal dates from the relevant documents (purchase and sale invoices, bank statements, cash transaction receipts).

Purchase date:     15 March 2024
Period expiry:     15 March 2025  (earliest tax-free sale date)
Sale on:           16 March 2025  → tax-free
Sale on:           14 March 2025  → taxable

Where multiple purchases of the same metal exist, German law mandates the FIFO principle (first in, first out): the units acquired first are deemed to be sold first. This is particularly relevant when building up a gold savings plan or making instalment purchases, since older holdings may already have exceeded the holding period while more recent ones have not.

Tax-Free Allowance: When Does a Tax Liability Actually Arise?

Even if the one-year period is not met, a statutory tax-free allowance applies: if all taxable private disposal gains in a calendar year together total less than €1,000 (up to 2023: €600), they remain tax-free. If the allowance is exceeded by even one euro, the entire amount becomes taxable — it is an allowance threshold, not an exemption.

What Falls Under the Speculative Holding Period?

Taxable private disposal transactions arise for physical precious metals in the following situations:

1. Sale before expiry of the one-year period — the disposal gain (sale price minus acquisition cost minus transaction costs) is taxable.
2. Exchange of one precious metal for another — this is treated as a disposal for tax purposes (e.g. exchanging gold for silver).
3. Sale of physically backed gold ETCs with a delivery entitlement — products such as Xetra-Gold or Euwax Gold II securitise an individual entitlement to delivery of real gold. The Federal Fiscal Court (BFH, ruling VIII R 35/14) therefore treats them like physical gold: gains fall under the one-year period of § 23 EStG and are tax-free after more than twelve months — not subject to withholding tax.

Commercial trading in precious metals, on the other hand, does not fall under § 23 EStG and is subject to entirely different tax rules.

Tax Advantage of Physical Precious Metals Compared

The tax advantage of the one-year rule clearly distinguishes physical precious metals from other investment forms:

The tax exemption after expiry of the one-year period applies regardless of the size of the gain — even a paper gain of €100,000 on physical gold remains entirely tax-free after twelve months.

Evidence and Documentation

Since precious metal purchases up to certain cash limits can be made anonymously (so-called cash transactions), the burden of proof for the acquisition date lies with the taxpayer. Without supporting documents, the tax authorities cannot recognise a favourable purchase date. Recommendations:

• Keep purchase receipts, invoices and bank statements for at least ten years.
• For savings plan purchases, keep a running record of all tranches with date and acquisition price.
• Secure custody statements from banks or precious metal dealers as additional evidence.

The estimated tax impact of an early sale can be calculated using the Tax Estimator. The current historical price data helps to determine the actual price gain.

Key Takeaway

Physical precious metal held in private assets for more than twelve months can be sold tax-free in Germany — regardless of the amount of the gain. Anyone who knows and documents the holding period can deliberately use this statutory advantage for long-term wealth accumulation.