VAT on Silver

Anyone buying silver – whether as bars, bullion coins, or industrial goods – is in principle subject to VAT (Value Added Tax) in Germany. This fundamentally distinguishes silver from investment gold, which is fully VAT-exempt under § 25c UStG and EU VAT Directive 2006/112/EC. For silver investors, this difference has significant practical implications: the tax raises the purchase price and therefore the break-even point when selling later.

Standard VAT Rate and Margin Scheme

In Germany, the standard VAT rate of 19 % applies to silver on the net purchase price. For example:

Net dealer price:      100.00 €
+ 19 % VAT:           +  19.00 €
──────────────────────────────────
Gross price (buyer):   119.00 €

However, many dealers use the margin scheme under § 25a UStG. In this case, VAT is not charged on the full selling price but only on the trading margin (the difference between the dealer's purchase and selling price). This procedure is available to reputable commercial resellers who acquired goods from private individuals or other margin-scheme dealers. The effective tax rate for the end customer then typically falls in the range of 5–10 % of the gross purchase price – depending on the dealer's specific margin. The margin scheme must be indicated on the invoice; a separate VAT amount may not be stated there.

Overview: Silver VAT in International Comparison

*In Singapore, qualifying investment precious metals (Investment Precious Metals, including silver of 999 fineness and above) have been GST-exempt since October 2012; the standard GST rate has been 9 % since January 2024.

Switzerland and Liechtenstein were previously used as attractive purchase locations due to their significantly lower tax rates. However, since 1 January 2014, the import of silver coins into Germany has been subject to the full import VAT rate (a reduced rate previously applied); the former tax advantage of importing from Switzerland or using a bonded warehouse has therefore largely disappeared for private individuals.

Which Silver Products Are Affected?

The 19 % VAT applies to virtually all silver products:

• Silver bars (cast or minted, any denomination)
• Bullion coins made of silver (e.g. Maple Leaf, Vienna Philharmonic, Britannia, American Eagle)
• Numismatic collector coins made of silver (dealer may apply margin scheme)
• Industrial silver (granules, semi-finished products)
• Scrap silver and broken silver in commercial trade

Not subject to VAT, on the other hand, is the private resale (private individuals are not entrepreneurs within the meaning of the UStG) as well as certain tax-exempt banking transactions under § 4 No. 8 UStG, insofar as silver is classified as a financial instrument – which is rare and contested in practice.

Impact on the Silver Price and the Premium (Agio)

The spot price for silver (e.g. the current silver price in euros) is a net market price excluding VAT. Dealers add their premium (minting costs, margin, logistics) to this price and then the statutory VAT. The silver surcharges due to the tax can be considerable compared to gold and directly affect the return: someone who buys silver and later sells it tax-free (private individuals sell without VAT) has the tax paid at purchase as a permanent cost factor.

The silver calculator can be used to calculate the current material value; the tax estimator helps estimate the total tax burden when buying and selling.

Margin Scheme in Practice – What Buyers Need to Know

1. Identifying mark on the invoice: "Margin scheme pursuant to § 25a UStG" – no separate VAT amount is shown.
2. No input tax deduction: Businesses using silver commercially cannot claim input tax from margin-scheme invoices.
3. Price comparison: A gross price of 110 € (margin scheme) can be cheaper than 110 € under the 19 % standard rate, because in the first case the tax only applies to the margin.
4. Resale: Private individuals can resell margin-scheme coins tax-free (not an entrepreneur = no VAT obligation). Attention should be paid to the speculative holding period (§ 23 EStG) and any gains.

Tax Advantage: Why Investment Gold Is Better Positioned

The EU has granted investment gold a special status since the special regulation for investment gold introduced with effect from 1 January 2000, because it is regarded as a money-like asset. Silver does not enjoy this status – even though it historically also had monetary significance as a coinage metal. For investors, this means: gold can offer a better net entry level at the same spot price, because no VAT inflates the purchase price.

Note: This article does not constitute tax or investment advice. For individual tax questions, please consult a tax adviser.

In Brief

Silver in Germany is subject to the standard VAT rate of 19 %; the margin scheme under § 25a UStG can significantly reduce the effective tax rate for the end customer. Unlike investment gold, silver does not enjoy an EU-wide VAT exemption – a factor that investors should always factor in when buying silver and comparing actual purchase prices.