VAT-free Silver storage in a bonded warehouse
Unlike gold investments, purchasing bars or coins made from white precious metals is generally subject to VAT, making silver, platinum or palladium bullion comparatively more expensive. The reason for this disparity is that gold is legally classified as an investment, whereas white metals are usually regarded as industrial raw materials. Nonetheless, duty-free warehouses can offer VAT-free silver storage.
A duty-free warehouse (ZFL) is simply a type of goods warehousing facility which serves as an interim storage repository for products of all kinds which, during this period of storage, can legally remain untaxed – and thus effectively a duty-free zone. Duty-free warehouses remain under the control of official customs offices, who are the authority responsible for approving and monitoring their use. There are seven of these bonded warehouses in Switzerland alone. One of the largest is the 15-hectare Embrach-Embraport area near Zurich, which is of international importance and can be accessed by all interested parties. Here, as with other such transit warehouses, the site acts as a duty-free area where goods can be stored without paying import duties.
Store silver duty-free and save on VAT
This tax-free concession applies not only to all kinds of classic merchandise and industrial goods, but also to physical precious metals. Though it is just as possible to store gold in a bonded warehouse, this strategy is less likely to prove a useful option. However, it is generally advisable to store silver without incurring VAT because of the potential savings involved. And likewise, platinum and palladium can also be accommodated duty-free. In all instances, these metals can be stored as coins, bars or granules according to preference.
Investors can arrange to store their white precious metals in a bonded warehouse through private providers such as Swiss Gold Safe. However, individuals cannot deliver and store goods there on their own account. Instead, they must be brought directly from the border to the designated warehouse using what is known as a customs transit procedure. As an alternative, it is also possible to purchase silver products from a precious metal dealer in Switzerland, who will then arrange to deliver them to your chosen bonded warehouse duty-free and VAT-free.
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- Tip: National and international customers can purchase VAT-free bullion silver via the Swiss precious metal broker Echtgeld Ltd., located in Switzerland.
Another variant of the bonded warehouse scheme involves what are known as open bonded warehouses (OZL). In contrast to ZFL warehouses, goods stored in OZL facilities are managed and monitored exclusively by private companies. However, just like ZFL premises, government customs officers regularly carry out checks on the movement of goods and stock. A distinction is made between individual storage and collective custody arrangements.
Advantages of using a bonded warehouse for silver storage
Storing silver duty-free has many advantages for investors. The most important consideration is that this option allows investors to fully utilise all of their available purchasing capital. So, rather like buying gold, there will be no VAT to pay on an investment holding. This is a particularly valuable choice for beginners starting off an investment portfolio, who, as yet, have not acquired any precious metals and have little experience of the procedures.
Within a bonded warehouse, all purchased silver stock remains one hundred percent the property of its respective owner. Storage arrangements include insurance cover, which gives investors peace of mind knowing they will not be exposed to the risk of unforeseen losses. There are also no quantity or weight restrictions, and investors have the convenient option of augmenting their holdings, or selling parts of them, at any time. Provided that any investment goods do not leave the bonded warehouse, they remain totally exempt from all VAT and customs duties. It is only when silver is outsourced – and thus officially imported into the country – that any levies have to be paid. At this point, the procedure in Switzerland is that value added tax of 8.1 percent then becomes payable.
- Here you can find out more about the Embaport duty-free warehouse located in Zurich.
Store and trade silver VAT-free
Anyone looking to buy silver or other white precious metals purely to set up a portfolio of assets, and then store them VAT-free, should focus on the most common products. These would probably include, for example, popular silver bars weighing 1, 5 or 15 kilograms which have been refined by LBMA-certified precious metal providers such as Argor-Heraeus or Valcambi. Your investment products can then be resold at any time without any problems.
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The same applies to silver coins. Bullion issues such as American Eagle, Australian Kangaroo, Silver Helvetia, Maple Leaf or Vienna Philharmonic in units of one troy ounce (31.1034 grams) represent the safest types of investment. They are minted in large quantities for investment purposes with a fineness of at least 99.9 percent silver.
- For more details, please see the article: Buy silver without VAT.
Why store silver in Switzerland?
Switzerland is considered an ideal storage location for precious metals. This is due to its stable economic and political status, while in addition, the country has strong historical traditions grounded in absolute respect for personal property and assets. Furthermore, the Swiss people have an enduring reputation for discretion and reliability. Switzerland’s local currency, tax advantages and, last but not least, its role as an important international trading centre for precious metals, are further attractive aspects. Switzerland enjoys a central European location which is easily accessible, and yet does not belong to the European Union (EU) – a unique status which invariably confers additional advantages.
Summary: The most important points about storing silver in a bonded warehouse
- Unlike gold purchases, investors have to pay VAT when buying silver and other white metals.
- However, by using a duty-free warehouse, silver can be acquired VAT-free and stored duty-free.
- VAT-free silver storage is available in Switzerland – for example, at Swiss Gold Safe in Embrach, in the canton of Zurich.
- Bonded warehouses are operated by private storage companies such as Swiss Gold Safe. Stocks of goods, and their movements, are monitored by Swiss customs.
- These goods are insured and holdings can be augmented or sold at any time. Value added tax and customs duties are only incurred when goods leave the transit warehouse.
- Common bar sizes and coin denominations are a recommended option when storing silver in a bonded warehouse.
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