Taxes & Law

Anti-money laundering law obliges precious metal dealers, above certain thresholds, to identify their customers and to report suspicious transactions.

The cash limit on gold purchases sets the amount above which dealers must establish and document the buyer's identity under anti-money-laundering rules.

When transporting precious metals across borders, declaration duties apply within the EU from €10,000, together with import VAT and customs rules on entry from third countries.

The FIFO principle (First In, First Out) determines that, when precious metals are sold, the units acquired first are treated as sold first for record-keeping and cost-basis purposes.

Flat-rate withholding taxes tax investment income at a fixed rate, but they do not apply to private disposals of physical precious metals in Malta – Malta levies no capital gains tax on such movable assets.

The holding period is the time between the acquisition and the disposal of an asset. In Malta, private gains on the disposal of movable property such as precious metals are, as a rule, tax-free regardless of the holding period.

Identity verification is the legally required establishment of a customer's identity when buying or selling precious metals above certain cash thresholds, under Malta's anti-money-laundering framework (PMLFTR).

Investment gold is a fiscally privileged category of gold (bars and certain coins) whose purchase is exempt from VAT across the EU.

The margin scheme is a special VAT arrangement under which dealers charge tax only on the trading margin (the difference between purchase and selling price), not on the full selling price.

An over-the-counter transaction is the anonymous purchase or sale of precious metals, securities or other assets for cash "across the counter", without disclosing the buyer's identity.

A private sale transaction is the disposal by a private individual of an asset - including physical precious metals - and, depending on the jurisdiction, may or may not give rise to a taxable gain.

The speculation period is a holding period, known from some jurisdictions, after which private gains from the sale of precious metals become tax-free – a concept that does not exist under Maltese law, where private disposals of precious metals are not subject to capital gains tax at all.

In many jurisdictions a de minimis threshold exempts small private gains from tax. In Malta, private disposals of bullion are not subject to capital gains tax at all, so no such threshold needs to be observed for precious metals.

In the EU, investment gold is exempt from VAT under Directive 2006/112/EC, provided it meets certain minimum requirements as to fineness and form.

The purchase of silver (bars, coins, industrial silver) is subject to VAT in Malta – in contrast to investment gold, which is VAT-exempt.