In 2012, Singapore has repealed a 7% tax on investment-grade gold and other precious metals. The change applies to gold of 99.5 percent purity, silver of 99.9 percent purity and platinum of 99 percent purity. Whilst one wouldn’t have paid that when storing gold in the Singapore Freeport anyway, this decision show the intention of the government to turn the country into a bullion trading hub.
“Most other financial centers consider gold as a financial asset so few place any kind of tax on precious metals and we discovered that it was an impediment,” said IE Singapore’s Lai. “We noted that gold demand increasingly is dominated by Asian consumers and investors and we feel that this is something we may have missed out on.”
This change brings Singapore’s tax treatment of investment-grade gold and precious metals in line with the practices of many developed economies, like Australia, UK and Switzerland.
To qualify for the GST exemption, the precious metals (gold, silver and platinum) must fulfill the IPM Qualifying Criteria. If the bars, ingots, wafers or coins are traded at a price not only based on the spot price of the precious metal it contains, but also other characteristics it possesses (e.g. rarity, aesthetic features, collector’s value), then they do not qualify as IPMs. GST is payable upon importation into Singapore.
> For more details on IPM Qualifying Criteria, please refer to www.customs.gov.sg
Singapore is optimized for business and investment. Many companies that operate in the precious metals vault business now find Singapore an attractive choice of setting up their business. Taxes on income and profits are low. There is no capital gains tax. Capital loss expenses are correspondingly not allowed as deductions. Dividends are not subject to withholding tax whether paid to a resident or non-resident.
Singapore Tax Governing Authority
The Income Tax Act of Singapore is the governing statute regarding corporate and individual taxation matters.
The Inland Revenue Authority of Singapore (IRAS), was formed in 1960 and was formerly known as the Inland Revenue Department. The Inland Revenue Authority of Singapore is a statutory board under the Ministry of Finance of the Singapore Government in charge of tax collection. It integrated all the key revenue collection agencies into one body, enabling the administration and collection processes to become more streamlined and better managed. IRAS has also made its mark as an efficient tax administrator and a service-friendly tax collector.