A taxpayer holds various domestic and foreign gold coins as investments. Some of the gold coins have legal tender status in the countries concerned but are not generally used as such. This is because the market value of the gold coins is higher than their nominal value.
The question raised if the gold coins held as investments qualify as cash in box for tax purposes. According to the Dutch tax authorities, the gold coins do not qualify as cash but belong to the asset category of ‘other assets”. The effect on the income tax due can be illustrated using the following simplified calculations based on the so-called notional return. Value of gold coins €500,000, no other assets or debts in box 3.
Tax calculation, gold coins as other assets
- Tax base 500,000 minus 57,684 is 442,316
- Taxable return 5.88% of €500,000 is 29,400.
- Tax due (442,316/500,000 x 29,400) x 36% is €9,362.
Tax calculation if gold coins were classified as cash
- Tax base 500,000 minus 57,684 is 442,316.
- Taxable return 1.44% of €500,000 is 7,200.
- Tax due (442,316/500,000 x 7,200) x 36% is €2,292
