Taxes on Investment Gold and Silver in the Czech Republic: VAT and Income Tax
How are investment gold and silver taxed in the Czech Republic? Investors are most often interested in two levels: VAT on purchase and income tax on sale. We summarise both clearly. The article describes the legal situation in the Czech Republic for individuals who are tax-resident there – if you are taxable in another country, that country’s rules apply. Always check your specific situation with a tax adviser.
VAT: gold vs. silver
Here the difference is fundamental:
- Investment gold is exempt from VAT (in the Czech Republic under Section 92 of the VAT Act; the exemption applies throughout the EU). The price therefore contains no VAT.
- Investment silver is not exempt – in the Czech Republic it is subject to 21% VAT, which is included in the price.
This is the main reason why investment gold is often the more tax-efficient entry investment than investment silver.
Income tax on sale
Under Czech income tax law, physical gold and silver are movable property. Income from the sale of movable property by an individual is generally exempt from income tax – and unlike securities or real estate, for movable property there is no holding-period test. For the ordinary investor this means that any gain on sale is usually exempt.
Watch out for exceptions – the exemption does not apply if the metal was included in business assets, in the year of inclusion and for 5 years after removal. It is then taxable income.
Reporting obligation for large amounts
Even exempt income can have an administrative impact: if a single exempt income exceeds CZK 5,000,000, it must be reported to the tax office in the Czech Republic (Section 38v of the Income Tax Act). No tax is paid on it, but the notification must be filed.
Why keep your documents
Keep your purchase receipts and the proof of any buyback. They prove the origin and value of the metal and make any communication with the authorities and a later sale easier. How to proceed when selling is summarised in the article How to safely sell investment gold.
Summary: gold vs. silver for tax purposes (Czech Republic)
- Gold: no VAT (exempt throughout the EU), sale by an individual usually exempt from income tax,
- Silver: with 21% VAT, sale by an individual also usually exempt from income tax.
Frequently asked questions
Do I pay VAT when buying gold coins?
No. Investment gold, including gold coins, is exempt from VAT throughout the EU (in the Czech Republic under Section 92 of the VAT Act).
Do I have to pay tax on a profit if I sell gold at a gain?
In the Czech Republic, an individual’s income from selling movable property is usually exempt from income tax, with no holding period. Assets included in a business are the exception. Other countries have their own rules.
Why is silver more expensive because of VAT?
Silver is not exempt from VAT, so in the Czech Republic its price includes 21% VAT. That raises the entry cost compared with gold.
Conclusion
The tax treatment is one of the reasons for the popularity of physical gold: purchase without VAT and, in the Czech Republic, a sale that is usually exempt from income tax. Tax rules can change – this article is not tax advice. Browse our range of investment gold and silver.
About the author
Adolf Baumann, analyst at Baumann Group a.s. (GOLDU), has been working with precious metals for over 30 years. He has seen euphoria, crashes and panic on the markets – and he still enjoys it. He explains in plain language what moves the price of gold and silver and how to handle them without unnecessary mistakes. His weakness? He refuses to wear a suit.
