RCM updates tax treatment for numismatic coins

The Royal Canadian Mint will soon start taxing precious metal numismatic coins in all provinces and territories according to an update posted to the Crown corporation’s website.

The Mint uses the Excise Tax Act definition of “financial services or instruments” to determine what coins are subject to goods and services tax (GST) or harmonized sales tax (HST). Following internal reviews and consultations with external tax advisors, Mint officials determined some numismatic coins are “modified to a degree where they no longer fit the narrow criteria for ‘financial services or instruments’ that previously exempted them from taxation,” according to a statement posted to the Crown corporation’s website.

These modifications can include but aren’t limited to embellishments (such as sculptures and moving parts) or crystals, gemstones or diamonds embedded into a coin.

“While the GST legislation hasn’t changed, the Canada Revenue Agency and court decisions have narrowed the interpretation of the financial services or instruments section of the Excise Tax Act,” reads the Mint statement.

Effective Sept. 28, coins with one or more modifications pushing a product’s total purity, including embellishments and embedded items, below 99.9 per cent for silver and 99.5 per cent for gold and platinum are subject to federal and provincial sales taxes.

For subscriptions, the changes will take effect with new subscriptions for 2021 coins and onward.

The Mint provides a chart listing the total percentage of taxes for coins sold or delivered to each province and territory. (Photo via mint.ca)

WHY THE TAX?

The Mint is “obligated to collect all applicable federal and provincial or territorial taxes,” according to its online statement.

In some provinces, sales tax is charged when the overall purity of a coin – including embellishments, jewels and moving parts – falls below 99.9 per cent pure for silver and 99.5 per cent pure for gold and platinum. In Manitoba and British Columbia, Provincial Sales Tax (PST) is charged when the selling price exceeds the face value of the coin.

“The selling price of the coins will not change.”

For full details, including a detailed tax treatment by province and territory, click here.

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