VAT on silver coins changes, what are the consequences?

VAT on Silver Coins has recently been increased from 7% to 19% as a result of a change in the law in Germany. As a result of this change in the law, the prices of silver coins in the Netherlands will also change, because traders buy them via Germany for tax reasons. This means that it will be more expensive to buy silver coins, but you will also get more money back for your coins when you sell them. The VAT increase has now been implemented for all silver coins on our website, both for purchase and sale prices. If you already own silver coins, you will now receive a higher price for them when you sell them. In this article, we answer the most important questions. What do you need to know about VAT on silver coins?

Why is VAT on silver coins changing?

At the end of September, the Ministry of Finance sent a letter, which states that the favourable VAT rate of 7% will henceforth only apply to collector coins, coins whose value is at least 250% of the intrinsic value of silver. For silver investment coins that have no collector's value, traders must now charge the high VAT rate of 19%. This applies to all popular investment currencies, such as the Austrian Philharmoniker, the Canadian Maple Leaf, the American Eagle, the British Britannia and the Australian Kangaroo.

With this VAT change, the German government is putting an end to a loophole that allowed traders to offer silver investment coins at the same favourable VAT rate as collectible coins. Until recently, the legislation also made a distinction between imports of coins from inside and outside the European Union, so the Austrian Philharmoniker coins were imported in a roundabout way to fall under the preferential tariff. To eliminate these differences, the German government has now increased the VAT on all non-collector's silver coins to 19%.

Why does this have consequences for the Netherlands?

Until recently, it was cheaper for gold dealers in the Netherlands to import silver coins via Germany. This benefit was passed on to the consumer, which meant that silver coins were often cheaper for consumers than silver bars. That advantage will now be abolished, because investment currencies have also become less attractive from a tax point of view. We have implemented this price change for all coins in our range, both the selling and buying prices.

What does this mean for the price of silver coins?

Due to the higher VAT, you will now pay more for silver coins and the difference between the spot price of silver and the price of a physical silver coin will increase. The difference between buy and sell price remains basically the same, because from now on we will also buy the coins back from you at a higher price. So it does not become more expensive to buy physical silver, you only pay more VAT that you will eventually get back when you sell the precious metal back to us.

Is it still interesting to buy silver coins?

In principle, silver coins remain almost as interesting as they were before the VAT increase. You may get less silver for your money due to the higher tax, but you will get it back when you sell the coins again. The only downside is that when you buy coins, more money is now locked up in the form of VAT, on which you do not make a return. Let's say you want to buy €10,000 worth of silver coins, you will now get fewer coins for that amount. This means that when the silver price rises, you effectively make a slightly lower return on your investment, but that you also have a slightly lower loss when the silver price falls. After all, part of your investment is locked up in VAT.

Can I buy silver without VAT?

There are still several ways to buy physical silver without paying VAT. The first option is to buy silver in combination with storage in Switzerland, as the precious metal is not taxed with VAT there. You then only pay for the physical precious metal and the additional storage costs. A second option is to purchase the precious metal for business purposes, so that you can settle the VAT. You do pay VAT on the purchase of the silver, but you can reclaim it via the tax return.

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On behalf of Holland Gold, Paul Buitink and Joris Beemsterboer interview various economists and experts in the field of macroeconomics. The aim of the podcast is to provide the viewer with a better picture and guidance in an increasingly rapidly changing macroeconomic and monetary landscape. Click here  to subscribe.