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RE: How to avoid VAT on silver purchases
Thanks for this very interesting and informative post. Question, if for example, one bought a silver coin in Germany for €20 and in a few years it is worth (hopefully :-) €100, then with silver you would be looking at a whopping VAT tax on the €80 profit. Right?
In Germany, with gold coins there is no VAT or capital gains after one year. Is that your understanding?
Hi. No, the VAT is a tax only on the purchase. It's like a sales tax. When you sell, hopefully with a profit ;) thats when you face a possible Capital Gains tax. The exact CGT will depend on your tax residency, your taxable income that year etc. As you say, CGT is zero in Germany, but in some places CGT is very high
Just searched and found this:
Differential taxation
As often happens, even in this case, there is a particularity in the German tax law. Silver coins which are imported from outside of the EU (e.g. the Canadian Maple Leaf, the American Eagle, the Australian Koala, etc.) or purchased from private persons are excluded from the new regulation. The importing trader pays the import sales tax of 7% and can then apply the so-called differential taxation. Equally, the trader who has purchased silver, platinum, or palladium from private persons before can apply the differential taxation.
When applying the differential taxation, not the total net sales price is taxed as usual, but only the difference between purchase and sales price, thus the trader's margin, is subject to the full tax rate of 19%. The name of this type of taxation derives from that.
Impact on private customers
The import sales tax of 7% added to the purchase price corresponds exactly to the old VAT rate of 7%. The additional differential taxation of the trader's margin is small, because the margins in the precious metal trading, as is generally known, are very small.
Therefore, most of the silver coins have only increased slightly in price since January 2014, on average approx. by 1% until now compared to the regulation valid until 31.12.2013.
https://edelmetalle-direkt.com/en/differential_taxation_0067.html
In my experience, this was couple years ago now, I paid basically zero VAT at that Dresden dealer mentioned. Bought 100 Maple leafs 1oz. I know of one other person who had similar experience. But hey, the tax people are always moving the goal posts to suit themselves so your mileage will probably vary. Good luck!