New legislation passed by the Singapore government on the taxation of precious metals is attracting traders and key industry players to the country. The new regulations, which came into effect on October 1, exempt the trade of investment-grade gold, silver, and platinum from the country's 7-percentGoods and Services Tax (GST). Previously, all trading of precious metals had been subject to GST.
The GST repeal will only apply to precious metals graded at 99 percent purity or higher. Only precious metals produced by refiners accredited in the "Good Delivery" lists of the London Bullion Market Association and the London Platinum and Palladium Market will be GST-exempt.
Just a day after the legislation took effect, major Swiss-based precious metals refiner Metalor said that it would be looking to build a gold refinery in Singapore due to the GST exemption. According to Metalor Chief Executive Scott Morrison, he has also been consulting with other industry participants on the possibility of setting up a business in Singapore, and the response has been positive.
"The GST exemption is yet another arrow in Singapore's quiver in its quest to become one of the world's top commodities trading hubs. Top firms such as Switzerland's Trafigura have already moved to Singapore due to advantages such as its Global Trader Programme, which enables trading houses to have taxes as low as 5 percent," said Ms. Jacqueline Low, Chief Operating Officer of Janus Corporate Solutions, a leading Singapore company incorporation services firm and the parent company of GuideMeSingapore.
"Another reason why companies in the gold industry will be keen on setting up in Singapore is its strategic location," she continued. "For refiners, it is hours away from Australia, the world's second largest gold production center. It is even closer to Indonesia, a relatively untapped resource containing the world's fifth-largest gold reserves. At the same time, the economy of the Asian region as a whole continues to climb in comparison to the rest of the world, and the increase of affluent individuals in countries like China and India has already translated into more demand for precious metals."
"Now, with the new law exempting GST for investment-grade precious metals, it has become extremely attractive to companies all over the world who are part of the precious metals industry. Trafigura already came months ago. With more firms looking to set up a commodities trading business in Singapore, the country is headed towards its goal of being the world's top commodities hub," concluded Ms. Low.
