Physical silver is one of the most common gateways into precious metals investment: it costs a fraction of gold and has historically moved more, both up and down. But that same volatility, and its different tax treatment, mean investing in silver requires understanding three things first: VAT, the gold/silver ratio and custody.
First things first: silver pays VAT
Unlike investment gold, which is exempt, silver is bought with the general 21% VAT in Spain. That initial extra cost is the most important particularity: for silver to be profitable, its price must rise enough to offset that 21% at entry. It is not a reason to rule it out, but it is a reason to factor it into the numbers.
The gold/silver ratio
It is how many ounces of silver equal one of gold. Historically high, many investors use it to decide the moment: 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 storing it weighs more heavily in the decision. A safe, a safe-deposit box or professional custody: each option has advantages, as we explain regarding 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 advise on the purchase of physical silver and gold in Valencia with full transparency on price, premium, VAT and custody. First consultation free and with no obligation.
Frequently asked questions
Does investment silver pay VAT?
Yes. Unlike investment gold, which is exempt, silver is bought with the general 21% VAT in Spain. That initial extra cost must be taken into account when calculating returns.
Is it better to invest in silver or gold?
It depends on the profile. Gold is more stable and carries no VAT; silver costs less, is more volatile and has more potential room to run, but bears the 21% VAT. Many investors combine both.
What is the gold/silver ratio?
It is how many ounces of silver equal one of gold. It is used as a reference to decide the moment of purchase: when silver is cheap relative to gold, it is usually considered 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.