Gold and silver among individuals: the market that dodges 21% VAT

The parallel gold and silver market that bypasses 21% VAT

A tracked package arrives with twenty one-ounce silver coins and no invoice. The buyer paid 27 euros per piece, closed the deal via private courier, and dodged the 21% VAT levied on physical silver in Spain. This is not an isolated case: for over a decade, individuals across the country have been buying and selling gold and silver ounces outside of official channels, adjusting prices to international market rates and adding a variable premium depending on the coin. It works because there's real demand and because the difference compared to official stores is often in the double digits.

You don't need to be a major investor. The average transaction rarely exceeds a few hundred euros. What moves are individual coins, tubes of twenty, or a few kilos as placeholders. And this micro-market underpins a discussion with more substance than it might seem: how much extra to pay over the metal's price, who is cheating, how to avoid the fiscal rip-off without breaking the law, and why Spanish silver ended up being so much more expensive than German silver.

What is the premium over spot and why it sets the price

The price of the metal, the famous spot, is just a reference. Everything else is premium: the cost of minting the coin, the seller's margin, and, above all, what the buyer is willing to pay to hold a specific object in their hands. A gold Krugerrand went from being offered at 1,360 euros to appearing at 1,025 euros years later. 50-peso Mexican coins, with 37.5 grams of pure gold, were advertised at 1,500 euros and later at 1,530, with a revealing detail: in Brussels, they were paid at 1,508, so selling them in Spain required accepting a discount or leaving them gathering dust.

There are two approaches to pricing. Those who sell at spot plus a low percentage, between 3% and 5%, and those who apply collector's premiums reaching 40%. A silver Philharmonic was advertised at 26.8 euros. An Eagle, at 27, with a minimum order of twenty units. A 1-kilo Kookaburra from 1992, at 990. The figure is striking when compared to the bargain prices that would trinc.

The 21% VAT and the flight to German stores

Here's the crux. Physical silver in Spain is subject to 21% VAT. Investment gold is exempt, making silver the fiscal black sheep of the sector. This difference with Germany, which has a much more lenient system, caused a shockwave among buyers. A newcomer put it bluntly: Spanish buyers were naive if they continued to overpay national distributors instead of ordering online from Germany. The message landed like a bombshell.

The response was swift. Buying three Kookaburras in Germany isn't worth it when you add shipping costs, they argued. For a small order, a national store can be cheaper than paying for international transport. It all depends on the volume. For 500 ounces, Germany wins. For three, it doesn't. And this nuance fueled the real discussion: not whether Spanish VAT is high—it is—but whether it's worth punishing the local distributor or simply choosing them when the order is small.

From 27 to 16.50 euros: the fall of silver in the secondary market

Nothing summarizes the decade better than the evolution of one-ounce coins. Eagles, offered at 27 euros in the early days, eventually appeared at 20.50 in the mid-term and 16.50 euros recently, when someone sold sixty at once. Almost 40% less for the same piece. Silver plummeted in international markets, and the secondary market trinc with a delay, with pain, and with offers that went unsold.

Whoever bought high is trapped. Whoever waited, bought at half price. This asymmetry explains why, in the later stages, pure bullion is scarce: hardly anyone sells silver at bargain prices if they can wait. Those who own coins and don't need liquidity stand firm, and the market fills with premium coins, much more resistant to falling prices.

The antiestéticar of your address ending up in the wrong place

Buying coins by mail introduces a risk that almost no one talks about at first. The buyer's address falls into the seller's hands and, by extension, into the hands of whoever sees the label at a sorting center. Those who accumulate metal at home become, on paper, a target. The discussion shifted towards practical solutions: receiving packages at work, using a P.O. box, giving the address of a trusted shop, or demanding that the seller not include any jewelry store name on the return address.

The most seasoned buyers have their routine. One recounted how he has orders sent to an external shop, under a different name, and monitors the shipment tracking to pick it up just as it's out for delivery. Another pointed out that work serves the purpose, unless someone at the office is tempted to open other people's packages. Certified mail offers relative comfort. The conclusion that prevails among those who have been doing this for years is uncomfortable: there's no way to eliminate the risk, only to reduce it.

Counterfeits: the panda that doesn't even show its purity

The metal market attracts counterfeiters like flies to honey. Batches of Chinese pandas circulated that, to trained eyes, were obvious: neither the one-kilo piece showed the purity nor the face value in yuan. The clue wasn't subtle, and the advice was the usual: be wary of collections that are too cheap and verify weight, diameter, and finish before paying. For those who want to be serious, programs for verifying the authenticity of bullion coins, including magnet tests, were even shared.

The other side antiestéticatured a buyer who acquired 400 silver quarters on a US platform and paid VAT at customs, an extra cost that surprised more than one person: shipping costs are also taxed. In return, they got several coins with numismatic value within what others sell by weight. The collector's lottery.

Bullion fades, leaving premium pieces behind

As silver prices fell, the composition of the supply changed. Pure bullion—coins whose price closely trinc the spot price—stopped appearing. Most listings became premium coins, inelastic to the quote: sellers prefer to keep them rather than sell at a loss. The consequence, as noted, is the gap between paper silver and physical silver, two different markets with the same name. Without a wholesaler behind it, one participant maintains, no one offers competitive prices in bullion.

Purism also emerged regarding what should be sold. It was argued that the market should stick to precious metals and related items, without becoming a second-hand flea market. And the most experienced voices insisted that all the information was already available, that novices were guided for free, and that any miraculous method immediately aroused suspicion.

Coins worth 30 euros for 27: below face value

What's chilling is the day coins worth 30 euros in silver were offered for 27, 10% below their face value. It sounds like a bargain and a warning: when silver falls enough, its metallic content approaches its nominal value, and selling them for less than they say is harder than keeping them. Bulk lots were also bought: someone was looking for 500 100-peseta coins at 6.50 euros each, and 400 'karlillos' (100-peseta coins) moved at 13.25.

The secondary market closed a chapter with Eagles at 16.50 euros, Krugerrands at 1,025, and premium coins resisting further price drops. The question that remains floating is not how much silver will rise, but how many are willing to let go of their coins when they haven't risen yet.