In the UAE, supplies of investment precious metals such as gold, silver and platinum of at least 99% purity, traded in line with international standards, are zero-rated for VAT. Jewellery and other gold items outside that definition carry 5% VAT. A reverse charge applies in certain business-to-business gold dealings, so the buyer, not the seller, accounts for the tax.
The basic rule
The UAE VAT law zero-rates the first supply of certain investment precious metals and supplies of such metals thereafter. Public descriptions of the rule refer to gold, silver and platinum with a purity of 99% or more that are traded on bullion markets under internationally accepted standards, such as gold bars. The detail comes from the VAT Decree-Law, the Executive Regulation and Cabinet decisions on how VAT applies to gold. Check the current decision text and the FTA's guidance for the exact definitions, since the form and purity of the metal decide the treatment.
What is taxed and how
| Item | Typical VAT treatment |
|---|---|
| Investment gold bars of qualifying purity | Zero-rated (0%) |
| Qualifying silver and platinum bullion | Zero-rated (0%) |
| Gold jewellery sold to a consumer | 5% on the full value |
| Gold sold between registered traders for resale or further manufacture | Reverse charge may apply; the buyer accounts for the tax |
| Making charges on jewellery | 5% |
The reverse charge for gold
The Cabinet introduced a reverse charge mechanism for certain gold and diamond dealings between registered businesses. Where it applies, the seller does not charge VAT. The buyer accounts for the output tax and recovers the same amount as input tax in the same return, if entitled to recover it. The result is a nil cash effect for the buyer but a clear record. Commentary says the mechanism covers B2B supplies where both parties are registered and the goods are for resale or manufacture, not personal use. Sources describe the start date and scope in different ways, so check the Cabinet decision and the FTA's guide. See the reverse charge mechanism.
Jewellery and retail sales
Jewellery is not an investment metal, even if it is gold of high purity. A jeweller selling to a consumer charges 5% on the full price, including the value of the metal and the making charge. Keep the weight and purity on the invoice and record the metal and labour components separately in your books for analysis. Tourists may claim refunds on eligible purchases under the tourist refund scheme; check the current rules with the operator and the FTA.
Records a dealer should keep
- Purity certificates and assay reports for each lot.
- Weight, form and description on each invoice.
- Evidence that the buyer is a registered trader where the reverse charge is used.
- Import and export documents and customs declarations.
- Stock movements from purchase to sale.
These records also support the AML duties of dealers in precious metals and stones; see AML fines for DNFBPs. Keep documents for the required period; see tax record retention.
Scrap and refined metal
Scrap gold, refining and recycling can raise separate questions, including whether scrap counts as an investment metal or falls under the reverse charge. We have not found a settled summary in public sources. Check the FTA's guide for the precious metals sector, or ask the FTA for a clarification; see FTA private clarifications.
Practical steps for traders
- Classify each product: investment metal, jewellery or scrap.
- Check each customer's registration status before you apply the reverse charge.
- Put the right tax code on each invoice.
- Reconcile stock and tax monthly.
- Review the position when you start a new product line or export route.
A worked example
A refinery in a free zone sells 10 kg of qualifying gold bullion to a registered bullion dealer. The sale is zero-rated, so no VAT is charged, and the refinery can recover input VAT on its own costs because zero-rated supplies are taxable at 0%. A retail jeweller sells a gold necklace for AED 10,000 to a customer. VAT of 5% applies to the full price: AED 476.19 of VAT inside a VAT-inclusive price, or AED 500 on top of a price of AED 10,000 before tax, depending on how the price was quoted. A trader buys scrap from another registered trader for resale, and the reverse charge may apply if the conditions of the decision are met. These are illustrations; confirm the classification of each item.
VAT and AML go together
Dealers in precious metals and stones are designated non-financial businesses with their own AML duties, including customer due diligence on cash transactions above a threshold and reporting through the goAML system. The same invoice files that support VAT also support AML evidence. See sanctions screening for businesses.
Exports and re-exports
Exports of gold and jewellery from the UAE can be zero-rated if the export conditions are met and proof is held. Keep customs declarations, airway bills and bank evidence. See zero-rated exports.
Frequently asked questions
Investment gold of at least 99% purity traded to international standards is zero-rated. Jewellery and other gold items carry 5% VAT.
5% on the full value, including the making charge.
Public descriptions refer to 99% or more. Check the Cabinet decision and the FTA guide for the exact definition.
In certain B2B gold dealings between registered businesses, the buyer accounts for the VAT instead of the seller.
Eligible tourist purchases may be refundable under the tourist refund scheme. Check the current conditions.
Public sources do not give a settled answer. Check the FTA's guidance or request a clarification.