Buying physical silver in Germany: VAT, storage and break-even

What you will learn

• How VAT applies to silver bars and coins in Germany, and what differential taxation means
• Why VAT on silver is a cost you normally cannot recover when you sell
• The pros and cons of home, bank, bonded and foreign storage
• How to calculate the break-even price of a physical silver purchase

Explanation

Investment gold is exempt from VAT in the EU (Gold course, lesson "Gold in a Long-Term Plan and German Tax Basics"). Silver has no such exemption, which makes physical silver far more expensive to own. This is general orientation as of 2026; the rules are technical and have changed several times, so check the current position with your dealer and a Steuerberater (tax adviser).

VAT on bars and new coins

A private buyer in Germany pays 19% VAT (Umsatzsteuer) on silver bars. Since 2014 the standard rate has also applied to ordinary bullion coins, which previously had a reduced 7% rate.

Differential taxation (§ 25a UStG)

Differential taxation (Differenzbesteuerung, § 25a of the VAT Act, UStG) is a margin scheme: the dealer pays VAT only on its own margin (selling price minus purchase price), not on the full price. It can apply when the dealer could not deduct input VAT on its purchase, for example second-hand coins bought from private persons. The invoice then shows no separate VAT and refers to the scheme.

For years, dealers imported bullion coins from outside the EU at a reduced import VAT and sold them under differential taxation, making coins much cheaper than bars. A 2022 letter from the Federal Ministry of Finance (BMF) ended this for ordinary bullion coins after a transition period. As of 2026, differential taxation is mainly found on second-hand coins and older stock; some collector coins follow special rules. Read the offer and the invoice.

VAT is a sunk cost

A dealer's bid is based on the metal value without VAT, and a private buyer cannot reclaim the VAT paid. The price must therefore rise by roughly the VAT, the premium and the buy-back spread before you break even.

Storage options

• Home: no fees, but theft risk, and silver is bulky. Household contents insurance (Hausratversicherung) often limits cover for valuables; check your policy.
• Bank safe deposit box (Schließfach): yearly fee; contents are often not insured automatically, and large amounts may not fit.
• Bonded warehouse (Zollfreilager or Zolllager): a customs warehouse where goods from outside the EU are stored under a special customs procedure. Storage models for private buyers used to allow VAT-free purchases while the silver stayed there. A BMF letter of 9 April 2026 on § 4 No. 4b UStG tightened the conditions, and dealer reports say new purchases in many such models now carry 19% VAT. Ask for the exact legal basis of any "VAT-free silver" offer in writing.
• Vault outside the EU (for example in Switzerland): local rules apply while the metal stays there; bringing it to Germany later triggers import VAT (Einfuhrumsatzsteuer) and customs formalities. Add storage, insurance and transport fees.

Income tax holding periods (§ 23 EStG) follow in lesson 12.

The break-even formula

break-even spot = (purchase price incl. VAT + total storage costs) ÷ (quantity × bid ratio), where the bid ratio is the dealer's buy-back price as a share of spot.

Worked example

Hypothetical example: spot €900 per kilogram (about €27.99 per troy ounce); holding period two years; storage €30 per year; dealer bid 96% of spot for bars and 95% for coins. Income tax and transport are excluded.

Option A – a new 1-kg bar, net premium 4%, plus 19% VAT.

1. Net price: €900 × 1.04 = €936.00.
2. Price incl. VAT: €936.00 × 1.19 = €1,113.84.
3. Total cost with storage: €1,113.84 + €60 = €1,173.84.
4. Break-even spot: €1,173.84 ÷ (1 kg × 0.96) ≈ €1,222.75 per kg, a rise of about 35.9%.
5. At unchanged spot: sale €900 × 0.96 = €864, loss €309.84.

Option B – 32 second-hand 1-ounce coins under differential taxation, total premium 18% over spot (no separate VAT).

1. Price: 32 × €27.99 × 1.18 ≈ €1,057.02.
2. Total cost with storage: €1,057.02 + €60 = €1,117.02.
3. Break-even spot: €1,117.02 ÷ (32 × 0.95) ≈ €36.74 per ounce, a rise of about 31.3%.
4. At unchanged spot: sale ≈ €850.99, loss ≈ €266.03.

Both options need a large price rise before any gain appears; a VAT-free gold bar usually needs only a few percent.

Common mistake

Practice activity

Hypothetical: spot €25 per ounce. You buy 10 new 1-ounce coins at €30.00 each including 19% VAT. You keep them at home and pay €20 a year extra insurance for three years. The dealer bids 94% of spot. (a) How much VAT did you pay per coin? (b) What is your total cost? (c) What is the break-even spot price, and how much must silver rise?

Key takeaways

• As of 2026, silver bars and new bullion coins generally carry 19% VAT in Germany; differential taxation is mainly limited to second-hand coins and older stock.
• VAT is a sunk cost for private buyers, so physical silver needs a large price rise to break even.
• Storage choices change both cost and risk; "VAT-free" bonded storage rules were tightened in April 2026.
• Calculate the break-even price before every purchase.

Next step

Next, you will compare paper silver: ETCs, futures, CFDs, metal accounts and mining shares.