VAT on Silver Coins and Bars in Europe
Although historically Silver and Gold were equally used as legal tender in Europe, before buying Silver investors should understand the key differences between how many countries treat the sale of Silver compared to Gold.
Most of the name brand high quality Gold coins and bullion products are exempt from VAT in Europe. This means that when an investor goes to buy an investment grade Gold coin, in most cases it will be free of sales tax.
For example, in Germany the criteria for Gold coins to be Exempt from VAT is as follows:
The Gold coin must not have been coined before 1800.
The Gold coin must have a minimum purity level of 900/1000
The Gold coin has to be or has been legal tender in the country of manufacture.
The open market value does not exceed more than 80%.
However, Silver is treated very differently and does not enjoy the VAT exempt status of Gold in most of Europe.
To give Silver investors a view of the existing VAT rates on Silver coins and bars in Europe we have provided a table below:
Italy 22% - Will increase to 24% in 2017
As you can see the VAT rates in some European countries is quite high. When investing in the precious metals, high Silver VAT rates have resulted in many Europeans choosing Gold over Silver.
Ireland and VAT
If we take Ireland as an example, there has been an ongoing discussion between Silver dealers and the Irish Revenue about VAT. As Silver investors know, each Silver coin has a face value that in many cases represents the legal tender of the coin. As a result, the question to Irish Revenue has been: Are official legal tender silver coins with a face value subject to VAT?
The response from Irish Revenue stated: Legal tender coins in use are not subject to VAT. Legal tender coins ‘in use’ means the Euro coins that we use in every daily life.
All traded pure silver coins for investment are therefore not legal tender. This is because they are “uncirculated” and not used for day to day purchases. This applies to all of the most popular silver coins sold in Europe, such as the Vienna Philharmonics, the Canadian Maple Leaf, the American Eagle and the Australian Kangaroo.
The Silver VAT situation in Ireland is similar to most other European countries. Pure Silver coins and bars are primarily bought and sold for investment purposes and are not used in day to day transactions.
Gold and Silver coins may be used again as a common way to pay for goods and services but that may still be a few years away. With the explosive potential that Silver has in the coming years the question becomes - What is the best way for Europeans to invest in Silver bars and coins given the high VAT rates in many parts of Europe?
How to Buy Silver in High VAT Countries
The good news is that Europeans have a couple of different options of investing in Silver, especially if you reside in a high VAT country.
Buying and Storing Silver Outside of Europe
First, you buy Silver in a country that does not charge VAT on coins such as United States of America, or Canada.
If you buy Silver in one of the above countries and keep it stored there, you will not be charged VAT on coins. However, if you ship your coins out of one of these countries you’ll need to pay a VAT to the country you ship to.
There are many high quality secure vaults in these countries that will store Silver on your behalf. We recommend that everyone do their own research. Selecting the right vault partner is important.
Global investment demand for precious metals has resulted in an increase in the number of high quality, secure, third party vaults that have become available to investors. Also, some experts encourage investors to diversify geographically.
Having Gold and Silver stored outside of your home country can be a good option for some investors to consider. Geographic diversification in today’s uncertain economic and political environment makes a lot of sense.
As usual, each individual investor needs to thoroughly research this option to determine if it is right for your particular set of circumstances.
CelticGold’s Estonian Branch with VAT-free Silver Operations
The second option is that you buy Silver through CelticGold and have the metal shipped from or stored in Estonia, which is the last VAT free rulings on legal tender silver coins in the European Union. CelticGold set up a Silver operation in Estonia in early 2013 that provides Silver buyers a safe and cost effective way to buy Silver in Estonia.
As of now, Estonia is the last country in Europe that does not apply a Value Added Tax to Silver coin purchases. As a result, many of the name brand coins such as the Silver Philharmonic, Silver Maple Leaf, Silver American Eagle are all VAT free.
When bought in Estonia, these Silver coins can then be transported to anywhere in the European Union very easily. The CelticGold Estonian Silver operation allows investors to store Silver in Estonia with G4S shipping can be done by finding a courier company that offers an insured shipping service. We recommend to do an internet search.
When choosing the storage option, the Silver is stored in a highly secure, fully insured vault with G4S. One of the benefits of third party storage is that the buying and selling process is easy, safe and secure.
CelticGold Estonia provides Silver investors with some of the lowest Silver prices in Europe.
CelticGold believes that Silver offers one of the best investment opportunities of any asset over the next 5 or 10 years. As a result, European Investors should not shy away from Silver as an investment due to high VAT rates.
As outlined above, for Europeans, there are ways to cost effectively and safely invest in Silver. However, it should be pointed out that VAT laws in Estonia could change in the coming years as governments look to find ways to address budget deficits.
As a result, it’s best to consider taking advantage of this opportunity while it exists.
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