Best places to buy gold and silver in Europe

Germany owns some of the world’s largest gold reserves, but it may not be the best place in Europe for buying gold and silver.

Dateline: Frankfurt, Germany

One of my favorite gold coin stores in Europe is here in Frankfurt. It’s not just that the place is in central Frankfurt (ironically not that far from the ECB), or that walking into it reminds me of a scene from The World is Not Enough.

It’s because service there is some of the best I’ve seen in Europe.

And while the European Union is now awash in information sharing, Germans and the other countries that share their language are a bit more private than than the rest of Europe about the gold-buying experience.

People here in Germany know something about the value of money, including how to save it.

The 500 euro note was created largely as a concession to Germans who wanted a comparable replacement for the 1000 Deutsche mark banknotes they used to easily keep cash at home.

Of course, Germany is the financial glue keeping the EU afloat during its meltdown. Germany recently told bankrupt Greece it’d have to endure some tough cuts despite all sorts of crazy begging tactics.

And here in Germany, gold and precious metals are treated by many like real money, not barbarous relics as they are across the pond.

 

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Precious metals are so respected that a single blogger was a big part of the movement to repatriate the German central bank’s gold from its current home (if you believe it’s there at all) at 33 Liberty Street in New York City.

However, Germany is not always the best place in Europe to buy bullion.

In fact, much of Europe is at a distinct disadvantage when it comes to buying precious metals because the governments here apply VAT (essentially, sales tax) to the purchase of some investment-grade metals.

As much as the Germans value their secrecy, they don’t value the ability to buy certain precious metals without a heavy markup that puts Europeans at a distinct disadvantage.

European VAT on precious metals

Throughout the European Union, investment-grade gold bullion and certain approved coins are exempt from VAT as they are considered an investment vehicle.

Some countries tax any capital gains earned from the sale of those gold coins; this is why living in and transacting your metals purchases in a country with no capital gains tax has its advantages.

Buying silver in Europe is another story. In the European Union, silver bullion is not allowed VAT exemption, and rates vary from country to country.

The lowest rates on continental Europe are in Switzerland, where VAT on silver is 8%. At today’s prices, that will add about $1.50 to each one-ounce silver coin… a little less than the low premium over spot you’d pay to an online dealer in the US, or from our friends in Singapore where your silver is stored for free.

In the European Union, rates can be substantially higher.

Germany actually has one of the lowest rates in the EU at 19%, slightly higher than Russia’s 18%.

The United Kingdom, home to a number of easy-to-use online gold dealers and numerous offshore gold vaults, has a 20% VAT on silver. So does Austria, where my beloved Austrian Philharmonic coins are minted and available directly from the Mint. Slovenia also has a 20% value added tax.

The Netherlands VAT on silver is 21%, while Poland assesses a 23% tax and Finland tops the charts at 24%.

How to avoid VAT when buying silver in Europe

There are two ways to get around paying VAT when buying silver in Europe, although it requires a little bit of legwork.

The first option is buying silver in Norway, which does not impose any VAT on such bullion. While Norway is not a member of the European Union (adding to its appeal), it is a member of the European Economic Area (EEA), which means Europeans have certain rights to move goods back and forth.

It is not, however, as simple as buying silver online from a Norwegian dealer and having it shipped to Germany. In most cases, such a transaction would be subject to tax on the receiving end.

And if you live in a more insolvent European nation, you might not want it shipped to you anyway.

The second and more attractive option for buying VAT-free silver is through Estonia. Estonia is one of my “7 New Safe Havens for 2015”, as I unveiled at our recent Passport to Freedom event in Cancun.

Estonia is the only country I can find in the EU that does not apply sales tax to silver bullion or silver coin purchases.

Again, it’s not simply a matter of buying silver from Estonia and having it arrive at your doorstep. The European Union has recently shown just how desperate it is to collect VAT by instructing anyone who has a business selling e-books to collect VAT based on the purchaser’s location, not where he or she lives.

In short, VAT is hard to avoid.

However, customers can purchase gold and silver through an Estonian firm and then have a third party courier deliver it to them. Customers can also pick up their silver in Estonia, which is part of Europe’s borderless Schengen zone and does not require any special visa to enter.

As of now, Silver Eagles, Silver Maple Leafs, Silver Philharmonics, and several Australian and Fijian coins are all VAT-free in Estonia and can be transported anywhere in Europe with a little planning.

The costs of doing so may make investing in gold more interesting to Europeans as gold bullion can be purchased anywhere without such hassles, and can be transported more cheaply.

If you’re not a European, I stand by my assertion that Singapore is the world’s best place to store precious metals. If you’re unsure what type of bullion to buy, you can read my suggestions here.

The reason for this is that premiums over the spot price are lower in Asia – namely Hong Kong and Singapore – than in Europe even when the tax is removed. Doing business in Europe is expensive and operations are often not as streamlined as they are in the Asian wealth hubs.

However, holding some of your precious metals in Europe can be a wise move. Switzerland has long been an excellent place to store gold and Austria offers one of the world’s only anonymous storage facilities.

Ensuring you don’t pay VAT when you don’t have to is as important as diversifying your affairs to legally avoid any kind of other tax. Just make sure you follow the correct procedures to avoid seeing your metals seized.

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Andrew Henderson

Andrew Henderson

Andrew has been internationalizing since 2008, and has learned what works and what doesn't work when it comes to reducing taxes, increasing personal freedom, and creating wealth. Click here to work with him personally.
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