Public Message from South Gippsland Bullion.

I just hope the government and ATO aren't working towards the introduction of an "amnesty" for declartion of PMs, or even a buyback program. Farfetched maybe, but so was the idea of GST on bullion coins a few weeks ago.
 
Bullion Baron said:
Some other coins are minted in unlimited quantities (in the year of release, same as the Kangaroo), such as the lunar coins that aren't 1oz.

But I wonder how the ruling would treat a 1/2oz, 2oz, 5oz lunar coin which would typically have a lower mintage than the 1oz version, even if the 1oz is the only one with the capped mintage... so GST on the 1oz even thought it has a higher mintage than some of it's unlimited counterparts?
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It sounds like it covers all bullion and so the size doesn't matter, and coins, rounds and bars are all to be taxed.
 
Bullion Baron said:
iceblue said:
Weights, mintage numbers irrelevant, people still 'collect' them in the retail market.
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So how do they differentiate between something 'collected' (as a retail buyer) and something stacked (as an investor)?

People collect 100oz Engelhard bars...
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They choose the parts of the GST ruling that supports thier argument.

For example, from one case:

Thus as explained in paragraph 13 of GSTR 2003/10, the fact that the coins are not traded solely on the basis of the prevailing spot price of the metal, indicates that they are not traded for their metal value only. As a result, for GST purposes the items do not have the character of precious metal, they have the character of coins made from metal. Consequently the supply of coins by you is not a supply of precious metal for GST purposes.

...

The major factors that differentiate bullion coins from proof or other numismatic or collectors' coins include the following:

Bullion coins are traded on the basis of their metal content, whereas proof or other numismatic or collectors' coins are traded on the basis of their numismatic, commemorative or rarity value. The price of gold, silver or platinum bullion coins is determined by reference to the prevailing spot price of the gold, silver or platinum they contain. In the case of numismatic or other collectors' coins, their value varies in accordance with the supply and demand for these items based on their novelty and rarity, as well as being influenced by movements in the metal price. The price for individual numismatic coins is also influenced by the condition of the coin. The price for proof coins is determined in reference to the spot price and also the additional value arising from their physical characteristics; they are exact reproductions, without flaws. Whereas for bullion coins the stamping only establishes their worth in terms of their metal value - the stamping only guarantees their fineness and the backing of government as currency. For proof coins, the additional quality of the finish is not related to the fineness and quality of the metal, but adds a further value associated with the quality of the finish and condition;

...39. Proof coins have a value determined by reference to the spot price for the metal they contain as well as by reference to their additional physical characteristics, including the quality of their finish. As noted at paragraph 12, this indicates that proof coins are not traded for the metal value only and therefore indicates that they do not have the character of the metal, but rather the character of manufactured articles, that is, coins made from the metal. Therefore, they are not precious metal for GST purposes.

The coins in question from your listing have been priced giving some regard to the spot price, however they have additional value due to their physical characteristics. The coins are manufactured to a particular finish and theme. These coins have been priced to reflect this additional value due to the detail of the finish of the coins. You have not advised the quantities of the coins that are manufactured, which makes it difficult to determine if they have an additional value due to their rarity. The information provided with your initial ruling request clearly refers to the items as collector coins and coin sets which implies that the coins are targeted at collectors. In addition, the fact that the coins have the year of manufacture on them implies they are only produced for a limited time. These coins are not bullion coins.

In contrast, bullion coins do not have the year of manufacture on them and are mass produced and freely available. Bullion coins are stamped to guarantee the fineness and the backing of the government as currency.

In summary whilst your coins are made of fine metals, this does not make them precious metal for GST purposes. The relevant test is not what the coin is called but whether it has the character of the metal. To be considered precious metal for GST purposes the coin must be no more than the form which facilitates the precious metal and it must be subject to fluctuating prices. This is clearly not the case with the coins in question. These coins are fixed in price and have the nature of collectible coins as they are finished to a level that would be purchased by a collector. The coins have an additional value due to their finish and the prevailing themes of the coin. The fact that the coins are also marketed as collector coins and coin sets confirms our view that these coins are not traded for their metal value only and for GST purposes do not have the character of precious metal; they have the character of coins made from metal. Consequently, the supply of coins by you is not a supply of precious metal for GST purposes.

As the coins are not precious metal under the GST Act, supplies of these coins are not input taxed supplies under section 40-100 of the GST Act. Supplies of the coins are taxable supplies.

https://www.ato.gov.au/rba/content/?ffi=/misc/rba/content/38652.htm
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"In addition, the fact that the coins have the year of manufacture on them implies they are only produced for a limited time. These coins are not bullion coins."
 
Bullion Baron said:
iceblue said:
Weights, mintage numbers irrelevant, people still 'collect' them in the retail market.
Click to expand...
So how do they differentiate between something 'collected' (as a retail buyer) and something stacked (as an investor)?

People collect 100oz Engelhard bars...
Click to expand...
In this case the ATO would state that the bars are not traded solely on the basis of the prevailing spot price for their metal value only. A degree of rarity and the fact they are no longer manufactured would result in a ruling that they are collector bars and therefore not a precious metal for the purposes of the GST act.
 
SilverPete said:
"In addition, the fact that the coins have the year of manufacture on them implies they are only produced for a limited time. These coins are not bullion coins."
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They will change those wording as they go.
 
Bullion Baron said:
SilverPete said:
"In addition, the fact that the coins have the year of manufacture on them implies they are only produced for a limited time. These coins are not bullion coins."
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So potentially impacts the Kangaroo also...
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Its crazy, and disasterous for confidence. There's too much uncertainty now :(
 
LOL so equally the Perth Mint hasn't been charging GST on nearly its entire mintage of coins, but it should have been...

giphy.gif
 
Bullion Baron said:
SilverPete said:
"In addition, the fact that the coins have the year of manufacture on them implies they are only produced for a limited time. These coins are not bullion coins."
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So potentially impacts the Kangaroo also...
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They're just going in circles from the bit which says the object
bears a mark or characteristic accepted as identifying and guaranteeing its fineness and quality;
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Coins bear an additional mark stating which year they were minted in.

Whoever wrote that private ruling determination seems to have figured that precious metals may only have fineness and quality marks. By the same logic, a generic bar that has a serial number on it is a "limited edition". You could also make the argument that stamping the manufacturer's logo on a bar makes it "collectible" because it doesn't explicity make any statement on quality, but in the real world it's understood to be a "good" brand e.g. Perth Mint, PAMP, RCM, etc.

BTW, if anyone can show me a coin that doesn't have the year it was minted on it, I'd be interested to see it.
 
LOL so equally the Perth Mint hasn't been charging GST on nearly its entire mintage of coins, but it should have been...

https://media.giphy.com/media/GjYjLvGErsggg/giphy.gif[/quote]

If the ruling just comes out, they can't back dated those acts.
May as well back dated the gst last century and say everyone owe to them.

What I am trying to say, is that the coins have been produce since before the gst era.
Putting a ruling like that will goes a long way. What sort of act or ruling is that?
Pre & post acts , ruling that implies complicate ruling. Therefore should be put in notices to public.
 
I did notice another point - the refiner must be in the business of refining. The person producing the "investment" bar may also be relevant here. I would envisage that "hobby" refiners should be charging GST on all of their products. Size of the business would be relevant here, however, when a company such as Perth Bullion buys from a "hobby refiner" and then resells that item, regardless of its specific form, GST should be charged on that item.
 
But are pre decimals taxable anyway?

According to the ATO:

DECISION:
...
2. The sale of pre-decimal coins will be a taxable supply.
Pre-decimal coins do not have the required fineness to meet the definition of 'precious metal', nor are they 'in an investment form', that is, they do not bear a characteristic identifying and guaranteeing the fineness and quality.
Since they are not precious metal, the supply of pre-decimal coins will not be input taxed, and will be a taxable supply provided the other elements of section 9-5 are met.

https://www.ato.gov.au/rba/content/?ffi /84289.htm
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OK since no-one else has said it:

This seems completely unworkable - nit-picking down to the level of what exactly is marked on any given bar, round or coin, and potentially re-assessing an item in the light of a subsequent secondary market.

Would it not make more sense to re-think the legislation to make it simpler and less broad? Surely the ATO cannot suddenly think it's a good idea to start enforcing a tax on almost all gold and silver products (including, obviously, most Perth Mint and RAM products) when it has never really come up in the decades-long history of the GST? How much revenue would it even generate?
 
Big A.D. said:
...By the same logic, a generic bar that has a serial number on it is a "limited edition". You could also make the argument that stamping the manufacturer's logo on a bar makes it "collectible" because it doesn't explicity make any statement on quality, but in the real world it's understood to be a "good" brand e.g. Perth Mint, PAMP, RCM, etc.

BTW, if anyone can show me a coin that doesn't have the year it was minted on it, I'd be interested to see it.
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Just focusing on mintage, I think the key determinant would be if the bar or coin was intended as "unlimited mintage" for that year, i.e., not artifically constrained in advance to a specific upper mintage limit. But of course in later years it may become collectable so what would that mean?
 
HoldMeTender said:
Would it not make more sense to re-think the legislation to make it simpler and less broad?
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I don't think making a tax less-broad is popular with the government at the moment.
 
SilverPete said:
HoldMeTender said:
Would it not make more sense to re-think the legislation to make it simpler and less broad?
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I don't think making a tax less-broad is popular with the government at the moment.
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That just proves it's a good idea ;)
 
But are pre decimals taxable anyway?

According to the ATO:

DECISION:
...
2. The sale of pre-decimal coins will be a taxable supply.
Pre-decimal coins do not have the required fineness to meet the definition of 'precious metal', nor are they 'in an investment form', that is, they do not bear a characteristic identifying and guaranteeing the fineness and quality.
Since they are not precious metal, the supply of pre-decimal coins will not be input taxed, and will be a taxable supply provided the other elements of section 9-5 are met.

https://www.ato.gov.au/rba/content/?ffi /84289.htm
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[/quote]

No, it is more, Govt: Do you own bullion?
Me: No (not according to your definition of bullion.)[/quote]

Thinks they own debts more than anything.
Fashionable across the world
Who have the most of... in the ranking
 
Bullion Baron said:
iceblue said:
Weights, mintage numbers irrelevant, people still 'collect' them in the retail market.
Click to expand...
So how do they differentiate between something 'collected' (as a retail buyer) and something stacked (as an investor)?

People collect 100oz Engelhard bars...
Click to expand...

Yes, well we would like to know that also. Some people dont really care what the image on the coin/bar is, some people do, its a highly subjective topic. In the end no matter what is on the bar/coin lay it on the table at the bullion dealer and he is going to pay spot - metal content only.

If I could speak my mind at the moment I would make a sailor blush.
I have been quoted from this forum, enough said.
 
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