It’s the first surprise for beginner investors: unlike gold, physical silver is subject to VAT at purchase. A decisive factor for profitability. Here’s what you need to know.
Gold exempt, silver taxed: why the difference
In France and across the European Union, investment gold benefits from a VAT exemption: recognised gold bars and coins can be bought tax-free. Silver, however, does not fall into this privileged tax category. It is treated as an ordinary good and therefore carries the standard VAT rate of 20% at purchase.
This asymmetry explains why many portfolios start with gold: the tax entry ticket is lighter. It takes nothing away from silver’s appeal, but it does mean thinking over a longer horizon.
What VAT concretely changes about the price
The purchase price of a silver bar or coin is built up as follows:
- Metal value (spot price × weight of fine silver)
- + premium for the format
- + 20% VAT
Take a 1 kg bar at a price of €1.66 per gram: €1,660 of metal, around €1,860 including the premium, then close to €2,230 once the 20% VAT is added. So from the outset you pay roughly €570 more than the bare value of the metal. Since an individual does not recover VAT when reselling, this means the price must rise by around 20%, plus the premium, before your resale breaks even.
This is why silver is often seen as a medium- to long-term investment: you have to give the price time to absorb this initial cost.
VAT and provenance: why some bars appear less taxed
Not all sellers apply VAT the same way. The rate actually borne depends on the seller’s tax regime and the provenance of the metal — which explains why an invoice can show far less than 20%, or even no apparent VAT at all.
- Standard regime (full 20%): new bars and coins sold by a conventional professional. VAT applies to the entire price. This is the most common scenario for a first purchase.
- Margin scheme (article 297 A of the French Tax Code): when a professional buys back silver already in circulation within the European Union (second-hand coins and bars) and then resells it, VAT is charged only on the profit margin, not on the total price. The effective VAT can then be well below 20%. This is perfectly legal, regulated and common on the investment-silver market: it is the real reason behind invoices showing “almost no VAT”.
- Import from outside the European Union: on entry into the territory, import VAT applies to the price increased by customs duties and transport costs. Depending on the nature of the good, the margin scheme may then apply on resale.
- Storage in a free port outside the EU (Switzerland, for example): as long as the metal remains in the free zone, no French VAT is due; it becomes due again when the metal is brought back into France.
And the famous “islands” route? A few years ago, “VAT-free” silver purchases existed via imported shipments (notably from the Channel Islands), thanks to a small-parcel exemption. This scheme was abolished across the entire European Union on 1 July 2021: it is no longer available today. If you hold bars bought “VAT-free” from the islands long ago, it is most likely this former regime — or a seller applying the margin scheme.
Bottom line: VAT on silver is not always “full 20%”, but be wary of promises of total exemption. Insist on an invoice detailing the VAT regime applied, and have your situation checked by a professional before any major purchase.
VAT at purchase, taxation at resale: don’t confuse the two
VAT concerns the purchase. Resale follows a different logic, with two regimes to choose from:
- The flat-rate tax on precious metals, levied on the total sale amount, with no need to prove a purchase price.
- The real capital-gains regime, calculated on the actual gain (sale price minus purchase price), with an allowance for holding period that reduces then cancels the tax over the years — provided you have the purchase invoice.
Hence a golden rule: always keep your invoices. They give access to the most advantageous regime and avoid being taxed on the full sale price. We cover resale in detail in our guide on selling a silver bar at the best price.
In summary
- Investment gold is exempt from VAT; silver carries 20% at purchase.
- This VAT inflates the entry price: the price must “catch up” before any capital gain.
- Legal solutions exist (free port, specific regimes) but add costs and complexity.
- VAT at purchase ≠ taxation at resale: keep your invoices.
To factor VAT into your calculation, check the silver price today and our buying guide. A question about a specific format? Request a free estimate.
This article is informational and does not constitute investment advice.