Physical silver is one of the most common ways into precious metals: it costs a fraction of what gold does and has historically moved more, both up and down. But that same volatility, and its different tax treatment, mean you need to understand three things before investing in silver: VAT, the gold/silver ratio and custody.
In this article
First things first: silver pays VAT
Unlike investment gold, which is exempt, silver is bought with the standard 21% VAT in Spain. That extra cost at the start is what matters most: for silver to deliver a capital gain, its price has to rise enough to make up for that 21%. It is not a reason to rule it out, but it does have to go into the numbers.
The gold/silver ratio
It is the number of ounces of silver that equal one ounce of gold. It has historically been high, and many investors use it to time their purchases: when silver is "cheap" relative to gold, it tends to have more room to run. We look at this in detail when comparing silver and gold.
Formats: coins and bars
Investment silver is bought as bullion coins (Maple Leaf, American Eagle, Philharmonic) and bars. Coins are more liquid and easier to verify; large bars carry a lower premium per gram. The choice depends on how much you invest and on your objective.
Custody
Silver takes up far more volume than gold for the same value, so storage weighs more heavily in the decision. A safe, a safe-deposit box or professional custody: each option has its advantages, as we explain in where to store physical metal.
The private investor bears that 21% as one more cost and does not recover it when selling. That is why silver makes sense above all as a medium-to-long-term investment, with enough room to run to overcome that initial drag.
Does it make sense for you?
Silver suits those who want to enter metals with less capital, accept more volatility and think long term. Many investors combine gold (a stable core, without VAT) and silver (more room to run, with VAT) according to their profile. Before deciding, it is worth reviewing the differences between silver and gold and how to buy physical metal without mistakes.
At Equus Capital we help you buy physical silver and gold in Valencia and explain the price, premium, VAT and custody clearly. The first consultation is free, with no obligation.
Frequently asked questions
Does investment silver pay VAT?
Yes. Unlike investment gold, which is exempt, silver is bought with the standard 21% VAT in Spain. That extra cost at the start has to be taken into account when working out the capital gain.
Is it better to invest in silver or gold?
It depends on your profile. Gold is more stable and carries no VAT; silver costs less, is more volatile and potentially has more room to run, but carries 21% VAT. Many investors combine the two.
What is the gold/silver ratio?
It is the number of ounces of silver that equal one ounce of gold. It is used as a reference for timing a purchase: when silver is cheap relative to gold, it is generally thought to have more room to run.
Where is physical silver stored?
In your own safe, a bank safe-deposit box or professional custody. As it takes up more volume than gold for the same value, storage weighs more heavily in the decision to invest in silver.
Risk notice. This content is for information only and is not personalised investment advice. Investing in real assets such as metals, loans or property involves risks, including the possible loss of capital, and past capital gains do not guarantee future results.