Switzerland is renowned for its breathtaking mountains, exceptional watchmaking, and delicious chocolate. 🍫, and it's no secret that the country is also famous for its well-established economy and political climate, making it a popular choice for investors looking to grow and diversify their portfolios.
That’s why Switzerland is often viewed as a preferred destination for investors and savers seeking to invest in gold and other precious metals for the long haul (while taxes undoubtedly play a crucial role, we'll delve into them later).
Despite Switzerland's reputation for political and economic stability, its investment landscape often sparks heated debate. Some people attribute this to the country's tax haven status, which raises questions about the transparency and legality of investments.
However, when it comes to investing in gold and other precious metals, Switzerland remains a top choice for many. Let's start from the beginning and explore why.
Swiss tax system: facts and fiction
One of the main reasons for the debate is Switzerland's historical association with tax evasion and secrecy. The country's banking system has long been known for its confidentiality, which has attracted wealthy individuals looking to protect their assets from taxation.
But is Switzerland really a tax haven?
In recent years, Switzerland has taken significant steps to increase transparency and crack down on tax evasion. The country has signed agreements with dozens of other countries, including the European Union, to share financial information, which has made it much more difficult for individuals to evade taxes.
💡What is tax evasion?
Tax evasion occurs when someone knowingly and intentionally underreports their income, profits, or gains or overstates their deductions when filing taxes. Some countries, such as the Cayman Islands, Bahamas, and Panama, are known for their status as tax havens.
Unfortunately, there is a common misconception that investing in gold, whether in Switzerland or any other country, can be a form of tax evasion. This is simply not true. Investing in gold is a legitimate and legal saving and investment strategy.
Switzerland's era of bank secrecy in tax matters officially came to an end in 2018 with the adoption of the OECD treaty, which was signed by over 100 countries.
As a result, this makes money laundering in Switzerland practically impossible, notably due to high level of due diligence and strict policies in place to prevent the handling of untaxed money.
💡The missing Nazi gold of World War II
During World War II, the German army confiscated a significant amount of valuable items, including gold. While some of the gold was returned to its rightful owners after the war, a significant portion of it remains missing, leading to ongoing speculation and curiosity.
One popular theory suggests that the missing gold may have found its way to Switzerland, a neutral country with favorable tax policies back then. However, there is currently no concrete evidence to support this claim.
Although it is difficult to comprehend the amount of gold that was stolen during the war and remains unaccounted for, the mystery surrounding the lost Nazi gold of World War II continues to fascinate people.
Who knows, perhaps someday, the missing gold will be discovered, and this enduring mystery will finally be resolved.🤔
Switzerland, the safest place to buy and store gold
Now, let's move beyond the tax debate and take a closer look at what makes Switzerland such an attractive destination for gold investors and savers.
Switzerland's history and expertise in gold
Switzerland is known for being a major player in gold refining, with its refineries processing around 80% of the world's gold. This expertise ensures that the gold you buy in Switzerland is of the highest quality and purity.
The country is home to four gold refineries, including the industry leader MKS PAMP. Therefore, if you want to buy Swiss-made gold bars, acquiring them directly from the source can be a good choice.
💡Where to buy gold bullion produced by MKS PAMP?
GOLD AVENUE is the official reseller of the MKS PAMP GROUP.
We offer a carefully curated selection of the best gold products sourced from the MKS PAMP refinery and a few selected reputable mints.
So, if you’re looking to buy gold, explore our gold products that are fully allocated and held outside of the banking system.
Switzerland: a neutral and independent hub for investors
Switzerland is considered one of the most stable and prosperous countries in the world, making it an appealing choice for many investors. Here’s why:
- Stable political and economic environment: Switzerland is known for its stable political and economic environment as it has the 2nd highest per capita GDP in the world and low public debt compared to other countries: at the beginning of 2021, the government's debt was around CHF 100 billion, which is only about 15% of the country's GDP. This means that Switzerland is in a relatively good financial position, which is great news for investors and anyone who cares about the country's economic stability.
- The lowest VAT rate in Europe: The VAT rate in Switzerland is only 7.7%, which is lower than in most other European countries. For example, when buying silver bars, you will almost always need to factor in the cost of VAT. But the good news is that you can buy VAT-free silver on GOLD AVENUE.
- Political neutrality: Switzerland has a long history of political neutrality, which means that it doesn’t usually take sides in political conflicts. This has helped to create a stable and secure environment for investors. In times of crisis, Switzerland's neutrality makes it less likely to be directly affected by conflicts or wars, which means that your assets will always be safe.
- Strategic location: Switzerland's strategic location in Europe is great for investment because it provides easy access to the European market, which is the largest trading bloc in the world.
💡What if Switzerland experienced an unprecedented economic or financial crisis?
Just imagine, Switzerland enters a severe recession and you have your gold stored in Swiss vaults.
Could the country seize your assets? The answer is no! Swiss law prohibits the expropriation of private property, so there's no risk of your precious gold bars and coins being taken to replenish the country's coffers.
So, for example, when you store your gold with a trusted dealer like GOLD AVENUE, you can sell it back to us at the metal price (also called the “spot price”) without any commission fees.
The best part is, our secure vaults are located right inside the MKS PAMP refinery, ensuring that the gold bars and coins you store with us never leave the refinery and thus keep their purity, so you can have peace of mind knowing that your precious metals are in a safe place.
Finally, Switzerland has favorable tax rules for buying and storing gold.
Do you need to pay taxes when buying gold in Switzerland?
It's pretty easy to buy physical gold and precious metals in Switzerland, just like anywhere else.
One of the biggest advantages is that Switzerland doesn’t apply VAT on gold and has some of the lowest VAT rates in Europe, currently standing at just 7.7%.
So, not only will you save money on taxes, but you'll also get more value for your investment. No wonder why Switzerland is a popular destination for investors looking to buy precious metals!
When it comes to holding your gold, there's an important step you should take to avoid any unpleasant surprises: check in with your local tax authorities. It's always better to be safe than sorry, right?
Tax regulations can differ from country to country, so it's important to find out what kind of taxes you may be subject to. By doing so, you can make sure you're prepared for any potential tax bills that may come your way.
💡When do you have to pay taxes on gold?
While gold is exempt from VAT in both Switzerland and all other European countries, it's important to keep in mind that taxes such as capital gains taxes, gold ownership taxes, and wealth taxes may still apply based on the regulations of your own country.
For example, let's say you're French and you buy gold bars on GOLD AVENUE - you won't have to pay any taxes on it right away. If you decide to store your gold with us, you still won't be taxed.
However, if you sell your gold back to us and transfer the money back to your French bank account, you'll need to pay the French capital gains tax on the profit you made.
So, while you can avoid paying taxes when buying and storing gold in Switzerland, it's important to keep in mind the tax implications of selling and transferring the funds back to your own country.
📚 Read our SPOTLIGHT to learn more about taxes on gold and precious metals.
What are the key takeaways?
- Despite some rumors to the contrary, Switzerland is a great option for buying and storing gold and precious metals.
- Switzerland is a major player in gold refining, with its refineries processing around 80% of the world's gold. The country's gold refineries ensure that the gold purchased there is of the highest quality and purity.
- Switzerland is known for its stable political and economic environment, with the second-highest per capita GDP in the world and low public debt. The country's VAT rate is also the lowest in Europe, and it has a long history of political neutrality.
- While gold purchased and stored in Switzerland is exempt from VAT, it's important to consider potential taxes on capital gains, gold ownership, and wealth in your own country when selling your gold bars.
💡Learn more about gold in our SPOTLIGHT: Investing in Gold: A Beginner’s Guide.