What is the difference between silver coins and silver bars?

Question

Accepted Answer

Those looking to invest in silver can choose between silver coins and silver bars. Both forms consist of physical silver and are traded worldwide. However, there are clear differences between these two investment options, particularly when it comes to VAT and storage.

VAT on silver coins and silver bars

To understand the difference between silver coins and silver bars, it is important to distinguish between VAT-liable and VAT-free silver. Silver is classified by the Dutch Tax Authorities as an industrial metal. Therefore, a 21% VAT rate applies unless coins fall under the margin scheme or bars are stored in bonded vaults abroad.

Silver coins and bars with 21% VAT

Newly issued silver bullion coins (recognisable by the most recent year of issue) and silver bars purchased or stored in the Netherlands are subject to 21% VAT.

Silver coins and bars without VAT

No 21% VAT applies to:

Silver bars with insured storage in Switzerland or Singapore
Silver coins labelled “various years”
Silver purchased via the precious metals account in the Holland Gold App or through the online client portal

These “various years” coins fall under the margin scheme, meaning VAT does not apply.

Differences between silver bars and silver coins

For private investors, purchasing VAT-free silver coins or bars is generally the most cost-effective way to invest in physical silver. The table below outlines the main differences:

Feature	Silver coins	Silver bars
Available weights	From ¼ troy ounce (7.78 g) up to 5 kg	From 50 g up to 1,000 troy ounces (31.1 kg)
VAT-free purchase available?	Yes – “various years” silver coins	Yes – with storage in Switzerland or Singapore (bonded vault)
Legal tender	Yes	No
Liquidity	High, recognised worldwide	High, recognised worldwide
Storage options	VAT-free in private possession or in storage	VAT-free only with foreign bonded storage (otherwise 21% VAT applies)

Similarities between coins and bars

Both are measured in troy ounces or kilograms
Both can be purchased VAT-free under specific conditions
Both consist of physical silver of the highest purity

Which option is the most cost-effective?

For most private investors, the following options offer the best value:

Silver coins – various years: previously circulated coins that qualify for the margin scheme and are therefore exempt from 21% VAT.
Silver bars in storage: when stored in a secure bonded vault in Switzerland or Singapore, no VAT is charged on your purchase.
Precious metals account: buy VAT-free physical silver per gram via the website, the client portal or the Holland Gold App. You decide the amount or weight – not limited to specific coin or bar forms.

Buying silver for business purposes

If you purchase silver as a business, you may be able to reclaim the 21% VAT on newly issued silver coins or bars through your VAT return. Always consult your accountant or tax adviser to confirm whether this applies to your situation before making a purchase.