When someone compares the price of gold and silver for the first time, they are usually in for a surprise: gold is acquired at practically the value of the metal plus a small premium, whereas silver starts with a notable extra cost. The reason lies not in the market but in taxes. Investment gold is VAT-exempt in Spain and throughout the European Union; silver is not.
This exemption exists because, for tax purposes, investment gold is treated in a way similar to a financial asset rather than a consumer good. It is one of the reasons it remains the benchmark metal for protecting wealth.
What "investment gold" is for tax purposes
The exemption does not apply to just any gold object, but only to what the law defines as investment gold. To fall into that category, a bar or a coin must meet specific requirements.
Bars and wafers
Minimum fineness of 995 thousandths (99.5% purity) and a weight accepted on the metals markets (from 1 gram up to 12.5 kg). They must come from accredited refiners and be supplied with their certificate.
Gold coins
Minimum fineness of 900 thousandths, minted after 1800, which are or have been legal tender in their country of origin and which are sold at a price no more than 80% above the value of their gold. Each year the EU publishes a list of coins that meet these requirements: Krugerrand, Maple Leaf, American Eagle, Vienna Philharmonic, among others.
Why silver does bear VAT
Investment silver does not enjoy this exemption. In Spain it is bought with the standard VAT of 21%, which raises the cost of the investment from the outset and explains much of that price difference that surprises newcomers. It is not that silver is "expensive": it is that it carries a tax that gold does not.
Unlike a company, the private investor who buys silver bears that 21% as one more cost. They do not recover it when selling. That is why, for silver to be profitable, its price must rise enough to offset that initial extra cost.
How it affects your decision
Taxation should not be the only criterion, but it matters. Gold comes in with an advantage because you buy almost pure metal with no added tax; silver has more room for price growth but starts weighed down by VAT. Before deciding, it is worth properly understanding the differences between investing in silver and in gold, the most common mistakes when buying physical gold and, for the future, how the sale of gold is taxed under personal income tax (IRPF).
At Equus Capital we advise on the purchase of physical metals in Valencia with full transparency on price, premium and taxation, so you know exactly what you are paying and why. First consultation free and with no obligation.
Frequently asked questions
Does investment gold pay VAT in Spain?
No. Investment gold is VAT-exempt in Spain and throughout the European Union. You pay the value of the metal plus a small premium, but not a 21% tax on the purchase.
What VAT does investment silver carry?
Investment silver is bought with the standard VAT of 21% in Spain. It does not enjoy gold's exemption, which makes it more expensive from the outset compared with gold.
Are all gold coins VAT-exempt?
No. Only those that meet the investment gold requirements: minimum fineness of 900 thousandths, minted after 1800, which are or have been legal tender and with a limited premium. Each year the EU publishes the list of accepted coins.
Does gold being VAT-exempt mean it is never taxed?
No. The exemption applies only to VAT on the purchase. If you later sell the gold at a profit, that gain is taxed under personal income tax (IRPF) as a capital gain.