Get Physical Silver Now - Taxes will go up by 11+% on 1st January 2025

It has been somewhat back and forth ever since June 2022 when Estonia decided to tax silver with regular VAT. The subject is fairly complex, especially for private investors seeking access to the “real” physical material at decent prices.

If you’re familiar with silver and taxation, please see the changes below, just the facts for you to be aware of.

For everyone else, please bear with us, while we explain silver taxation inside the EU in more depth.

1) Buying Prices for silver coins will rise between 11% and 15% depending on the country you are in, as VAT is applicable in the country where you receive your products. This will happen from 1st January 2025.

2) Existing and imported stock by 31st December 2024, under the margin scheme, can be sold into 2025 too. The margin scheme importation via Poland will end on 31st December 2024. Imports from 1st January 2025 will be subject to the standard VAT rate.

3) The margin scheme itself has not been cancelled or changed. Silver coming from circulation can be sold under the margin scheme, so bargains will be still available, but not on a large scale.

4) With the continuation of the margin scheme, buy back prices may also rise. We need to see and adapt to how the overall market will react. If you are thinking about selling and you can wait until January, that may proof to be a smart move as you might get that extra 10-15% in higher buy back rates.

To sum this up:

Get low-taxed margin scheme taxed silver until the end of this year, as long as stock lasts. This is an EU situation only. International markets are not affected by this.

Questions and Answers - Silver Taxation Change January 1st 2025:

1) What happens if I buy silver in 2024 but the shipment is due to arrive after the deadline of 31st December?

There is absolutely no issue. The shipments of margin scheme taxed products will not change. This also applies to shipments from allocated storage. Additional information: we always close logistics before Christmas, around 15th December, to avoid lost boxes in the usual pre-Christmas chaos. 

2) What will happen to silver coin bars?

The silver coin bars were introduced with the margin scheme as it allowed private investors to get the “known” sizes - 500 grams, 1 kilo, 5 kilos - at the lower VAT rate. With the quick change and announcements in the rulings, we will not be able to 

have sufficient quantities produced and available. Therefore, already existing coin bars can be sold and traded under the margin scheme without any restrictions. But for bargain hunting up to 31st December 2024 there won't be enough availability. Choose the standard 1oz silver coins instead.

3) Margin scheme? Never heard of it and my local bullion dealer has also never heard of it, can you explain?

The margin scheme is a separate taxation where standard VAT rate is charged on the margin of the seller. The product itself does not carry any separate VAT. The “one” price that you see includes all taxes.

The margin scheme has been around for a long time and was introduced into the collectors’ scene to make sure VAT is collected as auctions are often international sales and the government needed to make sure that VAT stays in the country.

The applicable VAT is simply calculated between the buy and sell price. For example:

A rare car is sold for 100,000 Euros, the seller bought it at 80,000 Euros, the margin is 20,000 Euro and the taxman - depending on the country you are in - would charge, say 20% VAT = 4,000 Euro of that sale.

But the price tag on the rare car shows "100,000 Euro” and the taxman collects 4,000 Euro from the seller and the seller is left with 16,000 Euro gross profit. The buyer does not “see” the VAT nor the profit margin.

4) And what does the margin scheme has to do with silver coins?

“Back in the day”, there was no VAT on silver coins when bought via Estonia. At that time the second cheapest place to get silver coins was Germany with 7% importation tax on “collective items” for silver coins. In addition to Estonia Germany had a special ruling, as all other EU countries charged a standard VAT rate. The margin scheme was first used by German bullion dealers as it allowed a decent 12% saving than compared to the standard VAT rate. 7% importation tax compared to 19% regular sales VAT.

Estonia changed their ruling with regard to the taxation on silver coins in July 2022 and Germany changed to regular VAT rate on 1st January 2023.

During the last half of the year 2023 a new route via Poland was established with an 8% importation tax. This will be closed by 1st January 2025. So you can see there has been a lot of back and forth over the last few years. 

5) Will I still be able to buy “cheaper” silver under the margin scheme in 2025?

Yes you can - if products are available. The German government have made it clear: bullion companies are allowed to “stock” by 31st December and sell the lower taxed stock into 2025. The question is: Is there enough product available?

We are securing allocations to arrive before 31st December 2024, but with the recent buying activity we are not sure if there will be any stock available at all. The secondary market is empty, the silver stock surplus that the entire EU market carried earlier this year has all gone.

As a general recommendation, get it while you can and while it is available and look out for bargains in 2025. We always aim to offer silver at the lowest possible rates.

6) What will happen to the price for new 2025/2026 coin series?

The standard VAT rate of your country will be applied. If you have the product shipped to Germany, it will be 19% German VAT, if you have the product shipped to Ireland, 23% Irish VAT will be applied. We, as the bullion company, have to charge the ship-to country VAT and also pay that VAT via a unified declaration to the ship-to countries.

In terms of price: The price will go up by that VAT difference from 8% Poland importation tax and, for example 20% = 12%.

7) Do I lose the VAT when I sell those coins back?

Yes and No. Yes, you will lose the VAT if you sell to a bullion company that does not operate under the margin scheme. No, you will receive in parts and/or in full the paid VAT back when you sell to a bullion company that does offer sell backs under the margin scheme.

As explained above, we have to adapt to the market, but the general move for sell back rates is up. 

Summary:

This is also the silver lining in the taxation change. For the private investor, the buying price may rise by 11+% but the buy back rates may also rise by 10 to 15%. From an investing point of view, silver has not lost its attraction, the buy/sell spreads will improve and physical product still ships without any restrictions across the EU. All in all, these changes are not a show stopper for investors. In addition silver holdings are not considered “Reportable Assets” in the EU wealth registry that is underway.