Germany silver tax

This is one of the issues that raise their ugly heads when somebody who has so far been a plain ordinary member is asked and agrees to become a moderator ... And no, my previous comment was not directed at you. See, my perspective is a different one: I live in Germany and the European Union, and we have been discussing this issue on German and European boards for a few years.

Long and possibly winding explanation ahead. In the EU there are three "levels" of VAT: zero, reduced and full/standard. Currently we have a standard rate of between 15% and 25%. Each member state sets its own rates, but the full rate has to be at least 15 percent.

The reduced rate (minimum 5%) is applied in various cases - primarily foods but again, that varies from member state to member state. And when coins are issued or "sold" at face, the zero rate applies - otherwise it would be hard to use them for payments, hehe. Once they are surcharged, VAT applies to the total price.

There is a long list of products and services where the reduced and zero rates may be used, including all kinds of "cultural goods". And yes, the system is somewhat ... chaotic. The point is, Germany has so far been the only member state where the reduced rate is applied to coins. In Austria for example it's zero for the current copper pieces (€5 and €10 collector coins) when you buy from the mint, 10% for the surcharged silver (€10 and €20) coins, and the regular 20% for bullion pieces such as the Philharmonics coins.

Again, I am not exactly happy that in Germany the exemption will now come to an end. But there have been debates about this for roughly ten years. Now why is silver in the focus? Because gold has a special "role" in the EU anyway (no VAT when you buy investment gold), and "PM bugs" care about silver, not about copper, brass or nickel ...

The other reason why you mostly read about silver in this context is that silver bars and silver medals have the 19% rate anyway. That is why some major dealers made agreements with the Cook Islands for example which started issuing 1 kg and 5 kg silver bars that have a face value ($30, $150) and are legal tender there. This way they count as coins - and magically the 7% VAT rate applies. As from 1 January the rate is the same no matter whether that 1 kilo bar has a (theoretical ...) face value or not.

However, with the exception of investment gold, the 19% rate will now apply to all coins. Which means that, when I buy from a dealer in DE from now on, I pay 19 percent - when I buy from a dealer in another member state, I pay the rate that applies there. Also keep in mind that in the EU the price tag is the end price - as a buyer I don't have to care about whether the store rent, electricity cost or some tax is already included or not. All I need to know is, what is the price that the seller charges, and (with mail order) how much will shipping be?

Now much of this - and now I get back to the first paragraph - is perfectly normal for Europeans. People here may not like this or that tax, but it's not an "alien" concept. In an American forum or site that is apparently different, as things often end up in debates about how evil taxes are and how this or that party wants to introduce something that is about as bad as what those darn Europeans/socialists (probably synonyms for some in the US) have or plan to do. Similarly, it was difficult to discuss euro coins here, as many contributions were more or less political.

In such cases I may stop contributing to a topic. That is not exactly the same as exerting any powers that a moderator formally has here. The fact that I did not stop in this particular case ... ah well, I can always blame you.

Christian - another Coin Talk member

 

Log in or Sign up to hide this ad.

Thankyou Christian. Back in the 80's they passed a law here, part of which disallowed rare coins in IRA accounts. I believe this was the reason ICTA formed. I sent a letter to one my senators, whose name I guess I better not say, flaming her stringy butt six ways to Sunday for voting for it. Her office sent me a form letter stating outright that they wanted people to have IRA's in financial assets not collectibles. See next post.

 

Memory of that change to IRA's may also play in part in strong reactions against laws, regulations ect. that are perceived to attack collectibles or PMs. It certainly works for me. As soon as I saw Armstrong's article the next thing I saw was that wench's smily face. It's a bad memory that never went away. Anyway, thanks for explaining VAT.

 

A tax expert would probably say I oversimplified things. We'll see how this change affects the market here ...

Christian

 

I agree that a Staff Member engaged in a conversation shouldn't be the same one to moderate the conversation. chrisild, seems like you may be a bit defensive. I'm not sure what was the trigger or who it was directed at. If I had a say, I'd keep the conversation and approach a little more open and realistic than a 1950's TV show.

Title says "Germany silver tax" and is located under the category of "Bullion Investing", lock the topic right away if we are not allowed to discuss Germany, silver and taxation. If you choose to interpret as such, you can find politics within almost everything and skew the rules here, to your perspective.

On topic, isn't Germany the only place in Europe that has such a low VAT on silver coins? Isn't this exception a special treatment, enabling an already well off country to dominate a large part of the precious metals market in Europe? Maybe your thoughts on this, if it belongs on this forum and under this thread?

Oh yeah, lets not forget, they managed to maintain such an advantage through one of the largest silver bubbles and crises in recent history.

 

Won't work in all cases, but as a general guideline that sounds good to me. As you will have noticed, I have not "moderated" anything in this topic. All the posts are there, nothing has been modified, and ...

... I don't see any reason to "lock" anything. Why? I find the title misleading, as there is no "silver tax". But since the article that longnine009 referred to (initial post) puts it similarly, it made more sense in my opinion to clarify things than to edit the topic title.

Hmm, let's see. I wrote "The point is, Germany has so far been the only member state where the reduced rate is applied to coins." Yes, that rate - effective until 31 December - includes silver coins.

Christian

 

The title of the topic caught my attention. Like you said, many coin forums in Europe have covered this topic. I don't recall any moderator directing people to a more "appropriate location" in any of the conversations I've read or took part in.

I believe you began with the politics of taxation on silver in DE. You mention decisions, conditions, federal government, Federal Audit Office complaints and tax rates. With all that, I am just confused as to what might be appropriate in my topic response and what might not be. Maybe some clarification as to which type of comments under this thread should be moved to "an appropriate location". Thanks.

 

I'm gonna crawl through you alls computer screen and moderate each and every one of you. It's a special power Mr. Gore gave to ME when he set up the whole interwebz. Be afraid, and post with one eye open.

Oh and you know what I would really enjoy seeing a super high tax on?

That pesky 'German Silver' you see all over eBay, you know the silver that isn't even actual AG silver. Almost doomed me a few years ago when I first started getting back into coins. I was buying silver and junk coins and almost got burned looking for a 'deal' with that mess.

 

However it may actually be, this does not address my confusion as to what I should write under this topic or what I must write in "an appropriate location".

Back to the topic...

My opinion is this, Germany has had an unfair advantage in silver bullion sales over all other EU members and has maintained this advantage through a key peak period in the silver market. It's about time the playing field was level. Too many bullion dealers across Europe have used Germany as their prime source of silver inventory, at the expense of their respective countries.

The staff can decide if this comment falls under the category of "how terrible Europe is". I tried to ask before continuing with the thread.

How naive do we really have to be? Whatever you want to call it, isn't it a 12% price increase on silver bullion coins?

It is a change that increases the current tax, making it a tax increase, any way I look at it.

 

Once again, not "silver bullion" in general. The end of the reduced rate affects coins, silver or copper or Cu-Ni or ... Silver medals and bars have had the 19% rate anyway.

There are hundreds of exceptions and exemptions when it comes to VAT rates, and what level is applied to which product or service in what member state. I already posted a link to the Commission's VAT page; you can also go through this list: http://ec.europa.eu/taxation_custom...tion/vat/how_vat_works/rates/vat_rates_en.pdf For example, four years ago the VAT rate for hotel stays went down from 19 to 7 percent in DE. Guess that, if Germany had been the only member state that did this, others would have complained about "unfair advantages". But since similarly low rates are used elsewhere too ...

If all you care about is silver bullion coins, sure. As a collector of brass coins, I might say it is an increase regarding brass coins. And if you collected silver bars or medals for some reason, you would find that the tax and the price are not affected.

Christian

 

Doesn't the silver Philharmoniker have a denomination and coin status? Isn't it the most popular silver bullion coin in Europe? Wouldn't the tax apply to other imported silver coins with a denomination (Silver Eagle, Maple Leaf, etc.)?

By discussing silver and not hotels or other exemptions, I'm trying to stick to the original topic and title. I do not really wish to expand into the politics of exemptions within the EU.

 

OK, I have both my eyes open for this post.

I have a question about how this silver tax is applied in coins.

Is it based on the value of how many grams equivalent of silver is in the coin -a fairly well known amount, or the numismatic value? i.e. Is the tax the same on a melt Morgan v MS69?

 

Right - see post #21, fourth paragraph. Coins imported from outside the EU, silver or not, would be subject to the import tax that I mentioned in post #8.

As for what Doug wrote, there is no reason why a staff member should not be active as a moderator in a discussion where he is involved. If anybody had used swear words here, one of the mods including yours truly would have done something about it.

But I agree, it would be bad style (or more) if a staff member edited or deleted posts simply because he dislikes the opinions voiced. That would be abusing the "powers" of a moderator.

Christian

 

You are welcome to single silver out, and to claim that there is something like a "silver tax". I tried to explain why there is no such thing. Cannot really add anything new here, sorry.

Christian

 

So, what effect will this have for those of us who do not live in Germany?
Will this affect outsiders selling coins to German customers? (maybe they want to avoid paying the tax?)
And how could it affect the German mints and their customers? (for example the mints producing African wildlife coins)

Maybe you guys can take the distracting off-topic stuff (about mods posting) elsewhere?

 

In other words, you are choosing to ignore my real concerns. Please continue to explain whatever you wish, don't expect any drawn out off topic answers from me, I see no reason to sidetrack the conversation any further, past the confusion already introduced into it by Staff Member chrisild.

When a Staff Member all of a sudden states there is "an appropriate location" for discussing silver tax or how terrible Europe is, especially under this topic, I figured I'd check what passes under his radar, prior to voicing my opinion.

 

Well then ... about this tax...

If I show up there and go through customs and declare $500 in US currency and a suitcase with a toothbrush, what happens?

 

I'm guessing, but, if your $500 are in Silver Eagles and they do not know any better, nothing.

If they count them as silver bullion coins, before the end of the year, they might charge 7% of the roughly $11 000 they are worth.

If you go next year and they count them as silver bullion coins , it should be 19% of the $11 000.

Judging by your photo in the avatar, you won't get that far. The toothbrush will be seen as a dangerous weapon and you will be detained. Your $500 will go towards your room and board while being detained.