Most precious metals bullion in Canada is exempt from GST/HST. Provided the precious metals are defined as coins, bars, ingots, or wafers of gold, silver and platinum. Additionally, they must be refined to a minimum purity of 99.50% for Gold and Platinum, and 99.9% for silver.
https://www.rktaxlaw.com/gold-platinum-silver/
Scrap Gold
An issue that the Canada Revenue Agency (CRA) typically has with sellers of precious metals, is the sale of scrap gold. Scrap gold is not refined to a purity of at least 99.5% and thus GST/HST is chargeable on the sale. Where this gets complicated is through the following example:
- Lebron sells scrap gold to Steph;
- Steph purchases more scrap gold and then sends it all to a refiner;
- The refiner smelts down the gold and turns it into 99.5% pure; and
- The refiner takes a fee for the service and then ships the 99.5% pure gold back to Steph.
The CRA occasionally takes the position that Steph sold the scrap gold to the refiner, and then purchases the pure gold. Why this matters is if that was indeed the case, Steph would have to charge GST/HST on the sale of the scrap gold to the refiner.
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/17-1/definition-fin...
Precious metals
Definition of precious metal
ss 123(1)
27. A "precious metal" is a bar, ingot, coin or wafer of gold, platinum or silver that is refined to a purity level of at least
- 99.5% in the case of gold and platinum, and
- 99.9% in the case of silver.
Policy statement
P-192, Supplies of Precious Metals
28. A precious metal in the form of a bar, ingot or wafer at the required purity levels must generally be recognized and accepted for trading on Canadian financial markets. Ordinarily, these will bear markings indicating their purity level. They will also have an identification mark of the issuing financial institution or refinery. With respect to coins, only those metals at the required purity levels that have been issued by a government authority and that may be used as currency will qualify.
29. Any supply of a precious metal (i.e., gold, platinum or silver) meeting the purity requirements, as set out in the definition of precious metal in subsection 123(1), is a supply of a financial service and generally exempt. Metals of this quality are normally investment-related and are usually bought and sold on international exchanges that establish world-wide precious metal prices.
30. The sale or purchase of a precious metal, in the course of a commercial activity, that does not comply with the defined requirements is not considered a supply of a financial instrument, but rather a supply of property. Generally, the sale of gold, platinum or silver in bar, ingot, coin or wafer form with a purity level of less than 99.5% for gold and platinum, and less than 99.9% for silver is taxable at 7% or 15%. The sale of gold, platinum or silver at the defined purity levels, but not in the form of a bar, ingot, coin or wafer (e.g., in granular form), is taxable at 7% or 15%.
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