Silver Bullion Coins: Taxes and Intra-Community Transactions Explained

Canadian Silver Maple Leaf Tax-Free from, silver bullion coins tax-free

After so much mis-information all over the internet, it may be time to clarify the real situation on VAT and physical silver bullion coins. Please note, that in light of recent EU decrees being enacted, as usual, without any democratic process or parliamentary control the situation is about to change for Germany and other countries hitherto applying their “low” or reduced rates to face-value bearing silver coins in contemporary currencies.

Being a member of EFTA — and not the EU — and relatively free from European regulations, Norway is likely to continue their policy of VAT-free silver bullion coins.

Please read the following explanations in order to get an idea of the situation in Norway and ways of legally transferring Norwegian-bought silver coins to EU member countries.

The European Union may be many things, first and foremost the underlying reason for today’s sovereign debt crisis, but apart from its infamous EMU (European Monetary Union) it includes the original EEC (European Economic Community) which happens to be what the electorate wanted in the first place; consequentially, the masses were originally sold on this idea only by our dear and supposedly well-meaning politicians. Apart from the EEC, there is also EFTA (the European Free Trade Agreement including Iceland, Liechtenstein, Norway and Switzerland), resulting in a greater EEA (European Economic Area) subject to bilateral agreements extending most EEC common market rules to EFTA member countries.

One very advantageous area of European Integration is the original EEC’s common market, established in 1992 and providing numerous basic freedoms, among them freedom of trade between member countries. This includes the total abolition of customs and duties as well as preferential tax legislation which are found in “intra-community trade” regulations.

On a bilateral basis, these rules have been extended to EFTA member countries.

The result is that in B2C commerce the seller’s domestic VAT rates uniformly apply to the entire transaction. If a seller is located in a low-VAT jurisdiction, that seller’s lower domestic VAT rate is levied on the purchase price resulting in a lower total gross price to be paid by the buyer. As there are no customs or import duties whatsoever within the entire free-trade area, this effect is not reversed at the port of entry, whether borders are crossed physically by the buyer himself or by a mail order shipment only. This produces significant savings when goods are purchased in lower-VAT countries within the EEC or EFTA. It has, therefore, become quite common to buy bullion coins from The Netherlands or Germany. Although the Dutch have recently subjected all silver (including bullion coins) to the country’s full 19% VAT rate and scrapped any incentive of buying from that country, there is a reduced rate of 7% applicable to silver bullion coins in Germany. Gold bullion is entirely exempt from VAT in Germany, and silver bullion is charged at their slightly-lower-than-in-the-U.K. 19% rate . On top, there are very low premiums over spot available at many bullion dealerships in Germany. Most investors buy online, but some even travel to the continent in order to pick up their phyzz locally.

With complex VAT rules largely unknown to consumers throughout the EU, it is little wonder that the intricacies of the wider European Economic Area are entirely off the radar for most people. Not surprisingly then, Norway’s very favourable zero-VAT rates on all bullion coins with a currency face value, resulting in an overall savings of 7% against German Umsatzsteuer, 20% against British value-added tax, and even up to 25% against exorbitant and super-progressive Utopia Moms rates in Sweden (depending on buyer’s “normal” rates at home) is generally only known to the smart money and larger investors. Real-life savings mostly depend on actual offers available in accordance with quotas under relevant European legislation and individual bullion dealerships’ quota leftovers in a given period of time. Picking up the phyzz locally as a traveller does not count towards the dealership’s sometimes tightly limited quotas though and is always an option as long as cost-benefit considerations justify the step. Norway seems intent to encourage gold and silver bullion coin investment and thus decided to grant VAT exemption accordingly (as they do with other essentials like electric power from Renewables to the countries northernmost localities). This very favourable zero-VAT situation translates to entirely tax-free bullion coin availability for all of Europe (EEA) on the basis of applicable EFTA rules. Total price including overall margin above spot price turns out to be similarly attractive when shipped from Germany though. A handful of bullion dealerships offer online ordering from Norway along with insured shipping, or buyers may arrange for local pickup of bullion coins if desired.

HMRC in Britain have confirmed that this is a possible route, and that no British taxes are owed if already taxed (or, as in the case of Norway, subjected to a zero-rate “tax”) in a European country.

Every serious bullion coin investor should make a note of this to improve return on bullion investment even further. Alternatively, continue wasting money on unnecessary taxes.


— Editor’s note: Back to those stacks of internet-based mis-information, anyone claiming that Norway as a non-EU country were excluded from that VAT regime appears to be fully unaware of actual and applicable EEA rules altogether and displays utter ignorance of today’s European reality. European institutions go far beyond the ubiquitous “EU” and include “smaller” agreements beyond that. (If in doubt, take just one look at a British ferry port with terminals hinting to the very existence of EEA matters left, right and centre.) Anyone failing to understand this fact does not know the first thing about European regulations and commerce at all. Also note, that some pawn shops and online platforms in the Baltics — newly part of the core-EU — have a vested interest in putting out pieces of misinformation in an already confusingly complex matter in order to boost their own sales of white-label bullion products. Sleazy or wilfully-ignorant dealers hyping up Estonia’s tax rules lose overall credibility and this display of dishonesty is not everyone’s cup of tea. We would rather buy from a reputable, civilised and secure location like Norway or Germany than send our money or personally venture out to the Wild East with pockets full of cash. EEA rules do result in legal tax-free commerce between Norway and the rest of Europe.