How to buy silver without paying VAT
An overview of the advantages of bonded warehouse storage for white metals
Physical silver has been a popular investment product for many years. However, investors must take into account that the purchase of white precious metals is subject to a statutory value added tax. As an alternative, bonded warehouses offer VAT-free purchasing of silver, platinum and palladium. This allows investors to acquire more bars or coins for their investment capital.
Gold investors have it much easier than silver investors, because when buying gold coins or gold bars in Europe they are not usually required to pay VAT. Historically, this anomaly harks back to the time when gold was still an official currency. Today, apart from jewellery production, which still remains subject to VAT, gold is considered a pure investment product. White metals, on the other hand, are treated as industrial raw materials and taxed at the point of purchase – primarily to avoid the risk of shortages. Since January 2024, the Swiss VAT rate has been 8.1%. In Germany, the VAT levy has stood at 19% since 2014. Austria imposes VAT at 20%, while the rate in Italy is 21%.
For investors, this means buying silver products is comparatively expensive in most European countries. However, it is still possible to legally avoid paying VAT. The solution is Switzerland’s so-called bonded warehouses (ZFL), for example at OrSuisse Ltd. These transit warehouses allow the purchase of silver without payment of VAT levies.
The tax-free alternative: What are bonded warehouses?
Arguably, the simplest way to store your silver is at home. However, depending on the actual value and quantity of this precious metal involved, a private storage option is not to be recommended. Firstly, there are important security and insurance cover issues to consider. And a further complication is that this type of storage arrangement automatically attracts a statutory value-added tax levy. However, this does not apply when purchasing silver which is immediately delivered directly to a bonded warehouse in Switzerland.
These are officially approved warehouses, outside the jurisdiction of the European Union (EU), for untaxed and duty-exempt goods such as precious metals, works of art or alcohol (e.g. fine wines). They are used by private warehouse companies such as OrSuisse, and are also open to all interested parties from Germany and abroad. All inventories and goods movements are monitored by Swiss customs and by company employees. As long as the goods do not leave the transit warehouse, no taxes or customs duties are payable. So this form of storage is particularly suitable for the VAT-free purchase of silver and other white metals.
Advantages of duty-free silver storage
White precious metals can be safely stored in duty-free warehouses, where modern high-security systems offer maximum protection against burglary and theft. OrSuisse provides its clients with segregated storage. This means all goods are stored individually, owners retain an absolute right of title to their property, and clients are guaranteed the return of the original items delivered into storage.
Another advantage of storing silver in an OrSuisse bonded warehouse is the inclusion of extensive insurance cover. The kind of volume and weight restrictions which can apply to storage in safe deposit boxes are not common in a bonded warehouse facility. In addition, the sale of individual pieces or an entire inventory can be organised at any time, as well as purchases arranged via an authorized precious metal dealer.
As a unique selling point, OrSuisse can issue what are known as negotiable warehouse receipts. Precious metals housed in individual storage are recorded on separate warehouse receipts alongside their value and ingot or seal numbers. According to the Swiss Code of Obligations, these documents are deemed to have the status of tradable securities and can thus be sold or transferred without any physical movement of goods.
Good to know: As a citizen outside of Switzerland, you can take advantage of extensive services such as no-fuss storage and retrieval arrangements, where you do not have to be present in person. Secure and discreet storage is guaranteed at all times.
What to consider when storing silver duty-free
In order for silver to be deposited in a duty-free warehouse and remain VAT-free, it must be bought duty-free at the time of purchase. Otherwise VAT must be charged on the transaction and the tax advantage of an interim storage facility will no longer apply. OrSuisse can recommend authorized precious metal dealers in Switzerland or other countries to clients who have not yet acquired their own precious metals, and to those who would like to expand their inventory.
As an investor, you can buy silver, platinum or palladium over the counter or online and have it delivered directly to a duty-free, high-security warehouse. Using this method, the purchase will not attract a VAT levy. Specialist dealers can also help if you wish to sell your precious metals directly from the ZFL, or wish to transact your negotiable warehouse receipts. Further information can be found in the OrSuisse FAQ section.
Which silver products can be purchased ex-VAT?
Silver and other white metals suitable for investment are available as coins, bars, or coin bars. They are offered in a variety of convenient units, so the right products are always available for every requirement and any budget. All these formats are suitable for storage in a duty-free warehouse, and thus for VAT-free purchase.
When choosing silver products, investors should always seek professional advice and choose well-known issues which can, if necessary, be readily sold on. These include classics such as the Maple Leaf, Krugerrand, Kangaroo or Vienna Philharmonic issues. These bullion coins all offer a high fineness and minting quality and have a nominal face value. That means they are considered to be a formal, valid means of payment in the issuing country. You should focus on the prestigious denomination of one troy ounce of silver, or 31.103 grams. Below is the list of well-known silver coins:
| silver coin | fineness | issuing country |
| American Eagle (since 1986) | 999.0/1000 | USA |
| Australian Kangaroo (since 1993) | 999.9/1000 | Australia |
| Britannia (since 1997) | 999.0/1000 | Great Britain |
| Chinese Panda (since 1983) | 999.0/1000 | China |
| Athenian Owl Silver Bullion Coin (2019) | 999.0/1000 | Niue |
| Helvetia (from Echtgeld AG) | 999.0/1000 | Switzerland |
| Krugerrand (since 2017) | 999.9/1000 | South Africa |
| Maple Leaf (since 1988) | 999.9/1000 | Canada |
| Vienna Philharmonic (since 2008) | 999.0/1000 | Austria |
When selecting silver bullion bars destined for a bonded warehouse, investors should favour products issued by manufacturers certified by the London Bullion Market Association (LBMA). They are available in various denominations from as little as one gram. Denominations of 1, 5, or 15 kilograms are particularly popular. Here is a selection of international silver refineries which have LBMA certification status:
- Argor-Heraeus SA, Switzerland
- Heimerle & Meule GmbH, Germany
- Metalor Technologies SA, Switzerland
- Pamp SA, Switzerland
- Perth Mint, (Western Australian Mint) Australia
- Royal Canadian Mint, Canada
- Umicore AG & Co. KG, Belgium
- Valcambi SA, Switzerland
What to consider when selling silver from a bonded warehouse
Silver coins and bars, as well as platinum and palladium products, can be sold from a bonded warehouse at any time. As long as the precious metal does not leave the ZFL and there is merely a change of ownership, the transaction will remain VAT-free for both seller and buyer. But once physical goods are taken outside this tax-free zone, they are immediately deemed imported goods and will thus incur VAT and customs duty.
However, the general practice is for investors to sell their precious metals to other investors or dealers who also store them duty-free. As a result, no VAT is incurred and the corresponding inventory is quite legally located within the same bonded warehouse, or taken directly to another transit warehouse.
Conclusion: Take advantage of bonded warehouse status
Bonded warehouse storage offers silver investors many other advantages in addition to the savings on statutory VAT. When storing physical white metals with OrSuisse, clients also receive negotiable warehouse receipts which can also be used as tradeable securities, which thus further increases the flexibility and purchasing power of any silver investment.
OrSuisse enables storage in bonded warehouses without a minimum storage fee.
An overview of the advantages of bonded warehouse storage for white metals
- VAT must be paid on purchases of silver, platinum and palladium.
- Storage in a Swiss bonded warehouse is an attractive alternative which enables the purchase of silver without paying VAT.
- Warehouses which can accommodate goods without incurring VAT and customs duties are operated by private storage companies such as OrSuisse Ltd and monitored by Swiss customs.
- Any client silver holding is insured, kept in segregated storage within a high-security vault, and at all times remains 100% the property of the respective client.
- Client holdings in storage can be sold, or expanded, at any time via authorized dealers.
- Special OrSuisse negotiable warehouse receipts can be traded just like securities.
