Why fraud in the precious metals industry is a focus for the ATO.
Fraud in the precious metals industry or gold bullion fraud consists of a process where criminals:
- purchase GST-free gold bullion
- refashion it into scrap
- sell it inclusive of GST to a refiner.
The seller then claims GST input tax credits by falsely stating the GST-free gold bullion was purchased inclusive of GST under the GST second-hand rules.
The illegal manipulation of the government’s interpretation of precious metals has been a focus for the Serious Financial Crime Taskforce (SFCT), which has investigated participants alleged to have been involved in gold bullion fraud.
Some of the participants in the precious metals industry include:
- refiners
- bullion dealers
- gold kiosks
- dealers and buyers within established supply chains involved in gold recycling arrangements.
Some of these individuals have tried to exploit the GST rules in relation to precious metals.
These artificial arrangements are established to obtain a benefit from the tax system of which there is no entitlement and are tax crimes.
Tax crime affects the whole community, reducing the revenue collected to fund essential community services, including health and education.
Our message is clear to those who try to evade or cheat the tax system: there is no place for you to hide and we won't tolerate this behaviour.
To confidentially report any known or suspected illegal behaviour you can:
- complete the tip-off form (the form is also available in the contact us section of the ATO app)
- phone us on the ATO tip-off hotline on 1800 060 062.
Our resources for participants in the precious metals industry include:
- Reverse charge in the valuable metals industry
- Sales covered by a reverse charge
- Determining whether the reverse charge applies to individual products
- Second-hand goods
- Record-keeping requirements.
Additional information on gold bullion fraud was released in an SFCT intelligence bulletin (PDF, 120KB)This link will download a file .