GST and HST on Gold in Canada: The 99.5 Percent Rule
Canadian law treats gold at 99.5 percent purity as a financial instrument and gold jewellery as a retail product. That one line changes what you pay at the till.
Gold in bar, ingot, coin or wafer form refined to at least 99.5 percent purity meets the definition of a precious metal in the Excise Tax Act, and a precious metal is a financial instrument under that Act rather than an ordinary good. Gold jewellery, which tops out at 91.67 percent for 22K and is usually 75 percent or less, does not meet that definition and is taxed like any other retail purchase.
Key takeaways
- The statutory definition requires two things at once: the right form, and the right purity.
- The form must be a bar, ingot, coin or wafer.
- The purity must be at least 99.5 percent for gold and platinum, 99.9 percent for silver.
- Gold jewellery fails the purity test at every normal karat, so it is taxed in full.
- Gold in another form, such as granules, fails the form test even at high purity.
Not tax advice
Vanhess is a jewellery shop, not an accountancy firm. This page is a plain-English summary of published Canadian law and CRA guidance, with links so you can read the originals yourself. Tax depends on your own circumstances and the rules change. Speak to a qualified accountant or tax advisor before acting on anything here.
What the statute actually says
Subsection 123(1) of the Excise Tax Act defines a precious metal as, in the words of the Act, a bar, ingot, coin or wafer that is composed of gold, silver or platinum and that is refined to a purity level of at least 99.5 percent in the case of gold and platinum, and 99.9 percent in the case of silver.
The same subsection includes a precious metal in the definition of a financial instrument. That classification is what takes it out of ordinary taxable supply and into the financial services treatment.
Both tests have to pass
| Item | Right form? | Right purity? | Meets the definition? |
|---|---|---|---|
| Royal Canadian Mint 1 oz gold bar, .9999 | Yes, a bar | Yes, 99.99% | Yes |
| Gold Maple Leaf bullion coin, 99.99% | Yes, a coin | Yes | Yes |
| Gold wafer at 99.99% | Yes, a wafer | Yes | Yes |
| Gold granules at 99.99% | No | Yes | No |
| 22K gold bangle | No | No, 91.67% | No |
| 18K gold chain | No | No, 75% | No |
| 14K gold ring | No | No, 58.33% | No |
Worth knowing
This is why a jewellery shop and a bullion dealer ring up sales differently even when both are selling gold. It is not a difference in business practice, it is a difference in what the law says the two things are.
On provincial sales tax
We could not verify how British Columbia provincial sales tax treats bullion in the Provincial Sales Tax Exemption and Refund Regulation, the BC Tax Interpretation Manual or the province's published exemption list, so this hub makes no claim about it. Everything below is the federal position, quoted from the statute and CRA guidance. Confirm the provincial side with a BC tax professional.
What it means in practice
If you buy a qualifying bullion product, GST and HST are not charged on it. If you buy a gold necklace, they are, on the full price. On a large purchase that difference is real money, and it is one of the concrete reasons bullion is the more efficient way to buy gold purely as an asset.
It also means the comparison people make between a bar and a chain of the same value understates the gap, because the chain carries tax the bar does not.
Frequently Asked Questions
Do you pay GST on gold bullion in Canada?
Gold in bar, ingot, coin or wafer form refined to at least 99.5 percent purity meets the definition of a precious metal in subsection 123(1) of the Excise Tax Act and is included in the definition of a financial instrument, rather than being an ordinary taxable good. Gold jewellery does not meet that purity threshold and is taxed as a normal retail purchase.
Why is gold jewellery taxed but gold bars are not?
Because the Excise Tax Act defines a precious metal by both form and purity. A bar, ingot, coin or wafer at 99.5 percent gold or higher qualifies. Jewellery is not one of those four forms, and at 22K it is 91.67 percent gold, at 18K it is 75 percent and at 14K it is 58.33 percent, all below the threshold.
Is 22K gold jewellery exempt from GST?
No. At 91.67 percent gold, 22K is below the 99.5 percent purity threshold in the Act, and jewellery is not a bar, ingot, coin or wafer. It fails both tests.
Does British Columbia charge PST on gold bullion?
We were not able to verify BC's provincial sales tax treatment of bullion in any primary source, so we do not make a claim about it here. Ask a BC tax professional. The federal position described on this page is quoted from the Excise Tax Act.