Tax classification of gold securities

Unlike gold certificates, ETF gold funds cannot be sold tax-free after a speculation period of one year.

Especially in times of crisis, gold has always been a very popular investment. However, for those who primarily want to speculate on the performance, trading in securities linked to gold can be significantly simplified. For income tax purposes, the question arises as to when such a security is equivalent to real gold. For only then is the sale of the security also a private disposal transaction, in which the price gain is tax-free after the speculation period of one year has expired. The German Federal Fiscal Court (Bundesfinanzhof) has issued two rulings on certain securities that show the difference.

In the case of bearer bonds traded on the stock exchange which securitize a claim to delivery of physical gold and reflect the current gold price, the sale is in any case a private sale transaction if the issuer is obliged to use almost all of the capital made available to it to acquire gold. This also applies if, upon termination of the bonds, the holder can demand payment of the proceeds from the sale of the gold deposited on his behalf instead of delivery of the securitized gold. In contrast to the tax authorities, the Federal Fiscal Court believes that in this case, too, primarily a payment in kind is owed.

The situation is different, however, for an ETF fund that invests its capital solely in physical gold. Here, the sale of the fund units leads to capital gains because the sale of the fund unit does not give rise to a claim to the delivery of physical gold. It is true that in the case in dispute the plaintiff could have demanded that her claim for payment of money arising from the return of the fund share be satisfied by the delivery of gold instead of a money count. However, in the opinion of the Federal Fiscal Court, this right is not a securitized claim to delivery in kind as in the case of a gold certificate.