Wondering what the capital gains taxes are on gold? That's a great question, as gold taxation can seem a little complex at first. Whether you have gold bars, coins, or even jewelry, it's good to know how the tax authorities handle resale. Don't worry, we'll explain everything for you, step by step.
Key Takeaways
- In France, the resale of physical gold is not subject to VAT upon purchase. This is a significant advantage.
- When reselling your gold, you have the choice between two tax regimes: a flat-rate tax or the capital gains regime.
- The capital gains regime allows a reduction of 5% per year of ownership from the third year, leading to a total exemption after 22 years.
- To benefit from the capital gains regime, it is essential to be able to provide proof of the date and price of purchase of your gold.
- The reporting procedures vary depending on the tax regime chosen; you generally need to complete a specific form (2091 for the flat-rate tax, 2092 for capital gains).
Understanding the taxation of gold capital gains
When you sell gold, you should know that you have the choice between two tax regimes. It's not always easy to navigate, but it's important to understand how they work to avoid unpleasant surprises. Basically, you can opt for either a flat-rate tax or the capital gains tax regime. Each has its advantages, and the choice will depend on your situation.
The two tax regimes on the resale of gold
The first is the flat-rate tax. It applies to the total amount of your sale, regardless of whether you made a capital gain or a capital loss. The rate is 11,5%, including the Precious Metals Tax (TMP) and the CRDS. It's simple, but not always the most advantageous if you bought your gold a long time ago and the capital gain is significant.
The other option is the real capital gains regime. Here, the tax only applies to the difference between your sale price and your purchase price. If you have a capital loss, you pay nothing. If you have a capital gain, the rate is 36,2% (19% tax + 17,2% social security contributions). The advantage is that there are deductions for the length of ownership, which can reduce your taxable base. This is often the regime that is most interesting in the long term.
Conditions for benefiting from the capital gains scheme
To be able to choose the real capital gains regime, there are a few conditions to meet. First, you must be able to prove the date and purchase price of your gold. Keep your purchase invoices, it's super important! If you can't justify these elements, you will automatically be subject to the flat-rate tax. The person selling must also be the same as the one who bought, unless you can prove a transfer by gift or inheritance. For ingots, it is advisable to keep their sealed packaging with the certificate, because they have an identification number that allows them to be linked to the original invoice. It's a bit like for investment gold coins, traceability is the key.
Declaration of sales of physical gold
When you sell physical gold, the declaration depends on the regime you have chosen. If you opt for the flat-rate tax, you must complete Form 2091 and submit it to your tax office within one month of the sale. If you choose the capital gains regime, you must use Form 2092. Keep in mind that if your sale is less than €5,000, you generally don't need to file a declaration, but it's always wise to check with your tax office. Keeping all supporting documents is really the basis for a worry-free declaration.
It is essential to keep all proof of purchase of your gold, as this is essential to benefit from the capital gains tax regime and its deductions for the length of ownership. Without this documentation, you will be subject to the flat-rate tax, which is often less advantageous.
The specifics of gold taxation
Taxation of paper gold
When we talk about paper gold, we think of ETF (exchange-traded fund) shares or mining company stocks, for example. The way these investments are taxed is quite different from that of physical gold. Basically, it's the same rule as for stocks or bonds. Capital gains you make when selling these products are subject, by default, to the 30% flat-rate withholding tax (PFU). This is also known as the "flat tax."
However, you have the option of opting for taxation according to the income tax scale (IR). In this case, your earnings will be taxed at your Marginal Tax Rate (TMI). Don't forget that social security contributions of 17,2% apply from the first euro of earnings, regardless of the option chosen. If your paper gold investments are housed in tax wrappers such as life insurance or a retirement savings plan, the taxation specific to these contracts will apply.
Tax treatment for non-residents
If you're not a French tax resident, the situation is a little different. Since January 1, 2014, non-residents have been exempt from the 11,5% flat-rate tax on their sales and exports of precious metals. There are still some conditions to meet, of course, but this measure may be of interest if you're not based in France.
Gold and the wealth tax
Before 2018, gold was included in the calculation of the Wealth Solidarity Tax (ISF). But that was before! Since January 1, 2018, the ISF has been replaced by the Real Estate Wealth Tax (IFI). And good news for gold holders: gold is no longer affected by this tax. So, if you own gold, you no longer have to worry about it under the IFI. This is a welcome simplification for investors in this precious metal.
Calculate and optimize your gold tax
Once you've sold your gold, you need to think about declaring and calculating the tax. Don't panic, it's not that complicated once you understand the rules. You should know that there are two main ways to tax the capital gain on gold in France: the flat-rate tax on precious metals (TMP) and the real capital gains regime. Choosing between the two can make a real difference in the final amount you pay.
Discounts for length of detention
If you opt for the capital gains tax regime, be aware that the tax authorities grant you tax reductions based on the length of time you held your gold. This is good news, as it can significantly reduce the amount of tax you pay. In concrete terms, a 5% reduction is applied each year starting from the third year of ownership. This may not seem like much at first, but in the long run, it adds up.
Total exemption after 22 years of detention
And the best for last: if you manage to keep your gold for 22 years, you benefit from a total exemption from capital gains tax when you resell it. Yes, you read that right, zero tax! This is an excellent reason to think of gold as a very long-term investment. You just need to be able to prove how long you held it, so keep your purchase receipts. This is the key to being able to choose the real capital gains regime and take advantage of this benefit. If you have proof of purchase, you can opt for this regime and potentially reduce your tax burden. by keeping your receipts.
Choose the most advantageous tax regime
So, how do you know which regime is best for you? It all depends on your situation and how long you've held your gold. The flat-rate tax is simpler: it applies at 11,5% of the total sale amount, whether or not there was a capital gain. This is often simpler if you don't have proof of purchase or if you held the gold for a short period. On the other hand, if you've held your gold for a long time and have proof of purchase, the actual capital gains regime, with its allowances, will often be more advantageous. You'll need to get out your calculator to compare the two options. For example, for tokens purchased 5 years ago with a capital gain of 87%, the flat-rate tax of 6,5% on €10,000 comes to €650. The calculation of the capital gains tax, after allowances, gives €1,431.15. In this specific case, the flat rate tax is more attractive.
It's essential to keep all documents related to your gold purchase. These supporting documents are your key to choosing the most favorable tax regime when reselling and potentially paying less tax.
The different tax categories of gold
When you decide to sell gold, it's important to know that not all types of gold are treated the same way by the tax authorities. In fact, how your gold is taxed will depend on its form and origin. It's a bit like gold having different tax "ID cards." It's important to understand these distinctions to avoid unpleasant surprises.
Precious metals: ingots and coins
For bars, ingots, or nuggets, the general rule is that they must be composed of at least 995 thousandths of pure gold to be considered investment gold. This is a fairly high purity, which makes sense for a product intended for investment.
For gold coins, it's a little more nuanced. For a coin to be recognized as investment gold and benefit from a potentially more advantageous tax regime, it must meet several criteria:
- It must have been minted after 1800. Think of Napoleons, Krugerrands, or American Liberty coins, for example.
- It must have been legal tender in its country of origin after 1800. This is the case for many older coins, such as the American Eagle or the Krugerrand.
- Its purity must be at least 900 thousandths. This is a little less pure than ingots, but it is a recognized standard.
There is an official list published by the European Commission that lists gold coins that are considered investment gold and are therefore exempt from VAT. It's always a good idea to check if your coins are on this list.
Jewelry, tokens and collectible coins
Taxation here can be a little different. For example, gold jewelry is subject to the standard 20% VAT upon purchase. When reselling, if the transaction amount is less than €5,000, you may benefit from a complete tax exemption. This is an interesting measure for small sales.
For tokens and collectible coins that do not fall into the "investment gold" category, the €5,000 exemption rule also applies. If you exceed this threshold, a flat-rate tax of 6,5% (including 0,5% CRDS) may be applied. This is an alternative to consider.
Legal tender gold coins
Gold coins that were legal tender in their country of origin, even if they are no longer used as currency, may also have special tax treatment. This is the case for many historical coins, such as the famous 20 Franc Marianne Coq in France. These coins are often highly sought after, both for their intrinsic gold value and for their historical or numismatic aspect. Their market liquidity is generally good, which makes them easy to resell. When selling, you have the choice between the flat-rate tax or the capital gains regime, as with ingots and investment coins.
It's essential to properly identify the exact nature of your gold before selling it. The distinction between investment gold, jewelry, and collectibles can have a significant impact on the amount of tax you'll have to pay.
Reporting procedures when selling gold
Once you've sold your gold, it's time to move on to the administrative formalities. Not taking care of this can cost you dearly in penalties. It's important to know that buying gold doesn't require any special procedures, but selling it must be declared. As an individual tax resident in France, if you didn't use a VAT-registered intermediary for your transaction, it's up to you to declare and pay the tax due. The procedures vary depending on the tax regime you chose for your sale.
Forms to complete for the flat-rate tax
If you opt for the flat-rate tax, which amounts to 11,5% of the total sale amount (including 0,5% CRDS), you will need to complete Cerfa form No. 2091 (or 2091-SD). This document requests information about your identity, address, and details about the transaction itself. It must include the date of the sale, the type of item sold (ingot, coin, jewelry, etc.), the total amount of the transaction, and how this amount is distributed among the different types of items if you sold several items. Don't forget to calculate the amount of tax to be paid. This form, along with the payment, must be sent to your tax center within one month of the sale. Don't delay, as late submission can result in fines.
Forms for capital gains tax
If, on the other hand, you prefer the capital gains tax regime for the sale of movable property, you will need to use Cerfa form no. 2092 (or 2092-SD). This form is a little different because it aims to calculate the difference between your purchase price and your sale price. To be eligible for the deductions for the length of ownership, you must provide the date and price at which you acquired your gold. This form must also be filed with your tax office within one month of the sale.
Proof of ownership and acquisition
To be able to benefit from the capital gains regime, and especially from the deductions for length of ownership, it is absolutely necessary to be able to prove when and at what price you bought your gold. Keep all your purchase invoices safe. Without these supporting documents, the tax authorities could refuse to apply this more advantageous regime. If you have held your gold for more than 22 years, you are completely exempt from capital gains tax, but you must still be able to prove it. The law specifies that any written document can serve as proof: an invoice, a contract, an expert report, a title deed... even if you no longer have to pay tax, the declaration remains mandatory to attest to this long holding.
It's important to note that if a VAT-registered professional handled your transaction, they will be responsible for all reporting and tax payments. In this case, you don't need to do anything else.
Concrete examples of taxation on the capital gain of gold
To fully understand how taxation applies to the resale of your gold, there's nothing like looking at some concrete scenarios. We'll see how the two tax regimes—the flat-rate tax and the capital gains tax regime with its allowances—can impact the final amount you receive.
Comparison between flat-rate tax and capital gains tax
Imagine you bought a bar for €20,000 five years ago and sold it today for €30,000. You would therefore have made a capital gain of €10,000.
- Option 1: Flat rate tax
- Option 2: Capital gains regime
In this example, choosing the capital gains scheme saves you €373.
Calculation of capital gains tax with allowances
Let's return to our previous example, but imagine that you kept your ingot for 25 years. The capital gain is still €10,000 (sale at €30,000 for a purchase at €20,000).
- Detention period: 25 years.
- Reduction for length of ownership: 5% per year from the 3rd year. Therefore, 23 years concerned (from the 3rd to the 25th).
- Total reduction = 23 years * 5% = 115%.
Please note that the reduction cannot exceed 100%. In this case, it is 100%.
- Taxable capital gain = €10,000 – (100% of €10,000) = €0.
- Tax = €0.
- Net amount received: €30,000.
This is the major advantage of the capital gains regime: after 22 years of ownership, the capital gain is completely tax-exempt.
Case of minted ingots and legal tender coins
It is important to note that taxation may vary slightly depending on the nature of your gold. Ingots and bars, if properly documented (nominative invoice, identification number), generally fall under the capital gains tax regime that we have just detailed.
So-called "collector's" gold coins or those that are no longer legal tender may sometimes fall under a specific regime, particularly if their value is less than €5,000. In this case, there is no tax to pay. If the sale exceeds this threshold, you have the choice between a flat-rate tax of 6,5% on the total amount or capital gains tax (36,2% of capital gains after deductions).
Legal tender gold coins, such as the 20 Franc Marianne Coq, are often treated as investment gold. They therefore benefit from the same tax regimes: flat-rate tax or capital gains tax regime with allowances for holding period. It is essential to keep purchase invoices to be able to prove the date and purchase price, which is essential to opt for the capital gains tax regime and benefit from allowances.
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In summary, to properly manage the taxation of your gold
So, now you know how it works for taxes on the capital gains on gold. It's not always easy, there are rules to follow, especially if you want to optimize everything. Remember to keep all your receipts; it's super important to prove when and at what price you bought your gold. This will allow you to choose the most advantageous tax regime for you when it comes time to resell. And if you ever have any doubts, don't hesitate to ask a professional for advice; it can help you avoid any surprises.
Frequently Asked Questions
What is capital gains on gold and how is it taxed?
The capital gain on gold is the difference between the price at which you bought your gold and the price at which you resell it. In France, for physical gold, you have the choice between two ways of being taxed: a flat tax that applies to the entire amount of the sale, or a tax on the difference between the sale price and the purchase price (the capital gain). If you have kept your gold for a very long time, you can even pay nothing at all!
Are there any advantages to keeping my gold for a long time?
Absolutely! The longer you hold your gold, the less tax you'll pay when you sell it. In fact, every year you hold your gold after the first two years, you get a tax break. And the best part is, after 22 years of holding, your capital gain is completely tax-free. It's a great reason to think long-term!
Do I have to pay taxes if I buy gold?
No, when you buy physical gold, such as bars or investment coins, you don't have to pay VAT. This is an interesting tax advantage. Taxes only occur when you decide to resell it.
How to choose between flat-rate tax and capital gains tax?
The choice depends on your situation. If you bought your gold recently and it has appreciated significantly, capital gains tax may be more advantageous, especially with the holding period discounts. If you have little capital gain or can't prove the purchase date, the flat-rate tax may be simpler and sometimes more advantageous. Get out your calculator to compare!
What are the steps to declare the sale of gold?
When you sell gold, you must file a tax return. If you choose the flat-rate tax, you must complete a specific form (2091) within one month of the sale. If you opt for the capital gains tax, you must use a different form (2092). It's extremely important to keep all your purchase receipts to prove the date and price, especially if you want to benefit from tax breaks.
Is paper gold taxed differently than physical gold?
Yes, it's different. Paper gold, like mining company shares or gold investment funds, is treated like securities. Any gains you make are generally taxed at a flat rate, but you can sometimes choose to be taxed at your own rate. It's a bit like selling shares on the stock market.
