Silver Surcharge Due to Tax

Anyone who buys silver – whether as a coin or a bar – pays 18 % VAT on the total price in Malta (as of 2026). This makes investment silver considerably more expensive relative to the pure spot price and is the most important structural difference from investment gold, which is fully exempt from VAT under Directive 2006/112/EC (as implemented by the Maltese VAT Act, Chapter 406 of the Laws of Malta).

Why silver and not gold?

The EU VAT Directive (2006/112/EC) grants member states a tax exemption exclusively for investment gold. Silver, platinum and palladium are not covered. Malta therefore taxes investment silver at the full standard rate of 18 %. Some EU countries apply reduced rates or special schemes – from which a locational advantage arises for buyers on paper, which must, however, be examined under customs and tax law.

How high is the effective surcharge?

The tax surcharge acts as a multiplier on the gross purchase price, not just on the spot price. The following example shows the typical price components of a silver ounce:

The buyer thus pays around 26 % more than the current spot price alone would suggest. Exact values for current prices are determined by the Tax Estimator.

The margin scheme as a special case

Under certain conditions, dealers established in Malta can apply the margin scheme (special scheme for second-hand goods): VAT is then charged only on the trading margin (purchase minus resale price), not on the entire selling price. The precondition is that the dealer bought the goods from a private individual or a seller not entitled to input-VAT deduction – typical when reselling used silver coins or scrap silver. This significantly lowers the effective tax share, often to around 3–6 % of the selling price. Whether a supplier sells under the margin scheme should be asked of the respective dealer, since a separate VAT statement on the invoice is then omitted. Further background in the glossary article on the margin scheme.

Effect on the break-even return

Break-even price increase = gross purchase price / net spot price − 1
Example: 35.40 EUR / 28.00 EUR − 1 = +26.4 %

Silver must therefore rise by at least this percentage so that investors do not incur a loss on sale – provided the sale proceeds themselves are not subject to VAT. Private individuals are generally not liable for VAT on sale; any gains are instead free of capital gains tax in Malta, since Maltese CGT applies only to specific assets (immovable property, securities, business interests) and not to movable assets such as precious metals. Note: this article does not constitute tax or investment advice.

What buyers should specifically bear in mind

1. Compare net vs. gross price – always compare prices between dealers on a gross basis, as some shops quote net prices.
2. Ask about the margin scheme – if it applies, the effective tax share is noticeably reduced.
3. Check the buying price – when selling later, determine the actual buy-back value using the Purchase Price Calculator; the dealer buy-back is on a net basis without any refund of the VAT paid at purchase.
4. Smaller denominations cost more – the smaller the coin or bar, the higher the dealer premium, which is itself taxed at 18 %.
5. Storage abroad – some providers offer duty-free storage outside the EU; the tax then only becomes due on import into the EU.

In brief

The tax-related surcharge on silver is not a hidden dealer advantage but a structural legal burden that affects every buyer in Malta. Anyone who calculates the total costs realistically and distinguishes net from gross prices avoids nasty surprises when buying – and when selling later.