The VAT rules when buying silver

In the Netherlands and the rest of the European Union, there is a clear difference between investing in gold and investing in silver. Investment gold is exempt from VAT because it is classified as investment metal in the European VAT Directive. This applies to gold bars with a purity of at least 995/1000 and to certain gold coins that meet strict conditions, including inclusion on the European Commission's annual list.

Silver, on the other hand, is not considered an investment metal for tax purposes, but rather an industrial raw material. As a result, silver bars and newly minted investment coins are subject to 21% VAT. This is a disadvantage for private investors, as the VAT cannot be reclaimed. However, there are exceptions and alternative options that keep silver attractive as an investment metal.

Silver as an industrial raw material

Silver is widely used in industry. It has unique properties that make it indispensable in sectors such as electronics, solar panels, medical applications and mirrors. It is precisely because of this broad industrial use that silver is not recognised as an investment metal in VAT regulations. This means that when you purchase silver bars or new investment coins, you pay 21% VAT. For a private investor, this means that the entry price for silver is higher than for gold, on which no VAT is charged.

An exception still applies to pre-owned silver coins and coin bars. These coins are purchased (back) by us via Inkoop Edelmetaal and are traded under the margin scheme, making them more tax-efficient. This makes pre-owned coins and coin bars very popular among investors at the moment.

VAT-free silver with storage

An alternative way to avoid VAT is VAT-free silver with storage. In this case, the silver is not physically brought to the United Kingdom, but stored in a customs warehouse, for example in Switzerland. Because the silver formally remains outside the EU, no VAT is payable.

This arrangement is particularly interesting for larger investment amounts (from approximately £20,000), as storage and management costs are charged. However, for investors who want to avoid VAT and own physical silver in the long term, this is an attractive alternative.

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Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.