How should bullion tax exemptions work?

[Bimetallic]

Hi all – Assuming that precious metals bullion should be exempt from consumption taxes like VAT, GST, and sales tax, as it is in many jurisdictions, how do you think the exemption should work, specifically? For example, would you exempt high-premium collectibles and slabbed numismatic coins, or just normal bullion? Would you exempt spot + a premium/margin that covered all normal bullion, but not slabbed or collectibles?

In the US, the sales tax exemptions are all over the map in how they're crafted and written. Nevada actually says that anything sold for more than 50% over its face value is taxable, which would be all bullion coins... In Asia and Oceania they tend to stipulate a certain purity, like 995, which excludes Sovereigns, Eagles, and Krugerrands. Some of those laws exclude "decorative" bars and coins, but they don't define or clarify what that means. I'm working on developing a clearer framework that I'll ultimately use to lobby in the US.

@LawrenceChard, how do you think a VAT exemption should work? What should it include and exclude? (And have you spoken to legislators in the UK about it?)

Thanks.

[Martlet]

Bullion should be free of sales taxes, its investment and they are sales tax free.  Collectible numismatics are second hand (as someone owned previously), though new semi-numismatic presents a problem there.  Tax the margin over sort or treat as if bullion. 

[Seth]

I personally would copy what Singapore does in regards to the taxation of precious metals with a few minor changes, the biggest being keeping VAT on inported silver like American silver eagles and maples but at a much much lower rate, and adding VAT to imported precious metals that currently don't have any VAT, something like 5% if not less - basically a token amount, and that is purely to encourage British people to buy British.

This is basically the system I would put in place:

The simple explanation: Are taxes due upon import / purchase of bullion in Singapore?

The Singapore Government's detailed explanation: IRAS e-Tax GuideGST: Guide on Exemption of Investment Precious Metals (IPM)(TwelfthEdition)