Euwax Gold II

Euwax Gold II (WKN: EWG2LD, ISIN: DE000EWG2LD7) is an exchange-traded commodity (ETC) issued by BNP Paribas Emissions- und Handelsgesellschaft mbH and traded exclusively on the Stuttgart Stock Exchange (EUWAX) in Germany. Each security represents precisely 1 gram of fine gold at a fineness of 999.9/1000 and is fully collateralised with physical gold bars meeting the LBMA Good Delivery standard.

How it differs from Xetra-Gold and conventional gold ETFs

Unlike a gold ETF or pure paper gold, Euwax Gold II carries a direct right to physical delivery: holders can exchange their units for gold in bar form from a minimum of 1 gram upward. The gold is held separately in the vault of a German custodian and is protected in the event of the issuer's insolvency (allocated gold).

Compared with the similarly structured Xetra-Gold (Deutsche Börse / DZ Bank), Euwax Gold II differs mainly in its trading venue (Stuttgart rather than Xetra) and its issuer. In substance the two products are close cousins.

Tax treatment (Ireland vs. Germany)

A word of caution on tax: Euwax Gold II is a German instrument built around German rules, and its much-advertised advantage does not carry over to an investor in Ireland. In Germany, gains on such a product fall under the private disposal rules and become tax-free after a holding period of one year (Paragraph 23 EStG). This one-year relief does not exist in Ireland.

For an Irish resident, a gain on selling a paper gold product such as this is generally liable to Capital Gains Tax at 33%, after the annual personal exemption of EUR 1,270. There is no reduction for how long the investment is held. Note too that the underlying gold, if held in physical investment gold form, is VAT-exempt in Ireland (VAT Consolidation Act 2010), but that exemption relates to VAT, not to the capital gains position on a security.

Note: This is not tax advice. Your individual position should be confirmed with a qualified tax adviser or with the Revenue Commissioners.

You can follow the current gold price and historical price movements on this site, and the tax estimator can help you gauge possible tax effects.

Costs and trading

Euwax Gold II charges an annual management fee, which is applied by gradually reducing the amount of gold backing each unit. The spread between the bid and ask price is set by liquidity on the Stuttgart floor and is usually tight. There is no entry load; only the broker's ordinary order fees apply.

In brief

Euwax Gold II combines the easy tradability of a security with the physical character of real gold, but it is a German product and its headline tax advantage is a German feature. An Irish investor should assess it under Irish Capital Gains Tax rules, where no holding-period relief applies.