How VAT Works on Gold Jewellery and Bullion in Dubai

VAT on gold in Dubai is based on two rules: standard 5 percent VAT that applies to most jewellery and non-investment pieces, and zero rating for specific conditions regarding purity and the nature of the transaction.

Understanding which category a transaction falls into is important for retailers, wholesalers, investors and tourists, because the wrong treatment can affect margins, refunds and compliance risk.

1. VAT Framework for Gold in the UAE

The UAE applies a standard VAT rate of 5 percent to most taxable supplies. It includes precious metals and jewellery.

At the same time, the VAT Law and Executive Regulations zero rate the supply and import of investment precious metals. These are gold, silver and platinum that are at least 99 percent pure and traded in a form accepted on global bullion markets.

In practice, this means:

• Retail jewellery attracts 5 percent VAT.
• Qualifying bars and certain bullion coins can be supplied at 0 percent VAT when they meet purity and market-trading tests.

Cabinet and FTA updates in 2024 and 2025 refined these rules for the precious metals trade, including specific changes for wholesalers and manufacturers.

2. VAT on Retail Gold Jewellery in Dubai

Gold jewellery sold to consumers in Dubai is normally subject to 5 percent VAT on the full invoice value. The taxable base usually includes both:

• The value of the gold
• Making or design charges

For example, if a bracelet price consists of AED 5,000 for metal and AED 500 as making charge, VAT is calculated on AED 5,500, giving AED 275 of VAT at 5 percent.

FTA public clarification confirms that making charges on non-investment gold items are part of the taxable consideration and do not qualify for separate treatment.

For online sellers and domestic marketplaces, the rules are similar. Gold jewellery supplied to customers in the UAE requires 5 percent VAT, even if platforms or logistics providers handle the delivery.

3. Investment-Grade Gold and Bullion

Investment in precious metals falls under a different regime. The VAT handbook summarising UAE legislation states that supplies and imports of investment precious metals are zero-rated when purity is at least 99 percent and the form is tradable on international bullion markets.

Practical examples include:

• 1 kg or 100 g gold bars with 99.9 percent purity that trade on bullion exchanges
• certain coins with 99 percent purity that are bought and sold as investment pieces

Advisory notes in 2025 reiterate that qualifying investment gold, silver and platinum are treated at 0 percent VAT, while non-investment metals revert to the standard 5 percent rate.

This distinction is important for bullion dealers and investors. A bar that fails purity or form tests, or a coin that is marketed as jewellery rather than bullion, can be re-classified into the standard-rated category.

4. Business-to-Business Supplies and Reverse Charge

VAT on gold in Dubai not only affect retail counters. It also shapes cash flow inside the wholesale chain. Specific Cabinet and FTA measures allow the reverse charge mechanism to apply to certain supplies of precious metals and stones between VAT-registered businesses. 

Under this model the recipient, not the supplier, accounts for VAT on qualifying transactions, reducing cash lock-up for traders. Alongside reverse charge, a profit-margin scheme can apply to eligible second-hand gold and jewellery, so VAT is calculated on margin rather than full selling price in specific cases.

These options depend on conditions such as both parties being registered, correct declarations and use of approved documentation. Incorrect application can lead to assessments and penalties, so many businesses treat them as projects that need written procedures and regular checks.

5. Tourist VAT Refunds on Gold Purchases

Tourism is a major reason people buy gold in Dubai, and VAT rules recognise this.

The standard 5 percent VAT applies at point of sale to eligible tourists, but a refund can later be claimed under the official Tax Refund for Tourists Scheme operated on behalf of the FTA.

Key features include:

• Only overseas tourists aged at least 18 are eligible.
• Purchases must be made at retailers registered in the electronic refund system, currently operated by Planet.
• A digital tax-free tag or barcode is attached to the invoice at the shop.
• At departure, the tourist validates the purchase at self-service kiosks or counters and selects a refund method, such as card or cash, within scheme limits.

These steps apply to many goods, including gold jewellery that carries 5 percent VAT, which makes Dubai’s gold market more attractive for visitors.

6. Invoicing and Documentation Expectations

Gold traders need invoices that reflect the correct VAT treatment and satisfy inspection standards.

For standard-rated jewellery, tax invoices should show:

• supplier and customer details
• description of the item
• value of gold and making charges
• 5 percent VAT amount and total consideration

FTA clarifications emphasise that invoices for investment precious metals should still record the supply, with VAT shown as 0 percent and supported by evidence of purity and tradable form.

Where reverse charge or margin schemes apply, invoices must follow specific wording so that both parties can show how VAT has been accounted for in their returns.

Well-kept records help explain differences between zero-rated bullion, standard-rated jewellery and margin-based resales during any FTA review.

7. Market Impact And Behaviour

The introduction of 5 percent VAT in 2018 had a clear effect on jewellery demand. Gold industry data show that UAE jewellery consumption dropped around 25 percent in 2018 compared with 2017, after a rush of buying ahead of the tax.

More recent changes targeted wholesale and manufacturing chains. It included adjustments to the precious metals reverse charge rules and Cabinet updates in 2024 and 2025. These adjustments aim to keep Dubai competitive as a gold and jewellery hub, while maintaining clear audit trails in the VAT system.

8. How Arnifi Helps With VAT on Gold in Dubai

Arnifi works with jewellers, bullion traders and family offices that need consistent treatment of VAT on gold in Dubai. We map existing product lines against VAT categories such as retail jewellery, investment precious metals and secondary-market items.

Our team then reviews contracts, invoices and POS systems to check where 5 percent VAT, zero rating, reverse charge or margin approaches should apply. 

We provide expert accounting and bookkeeping services in UAE to align frontline staff with documented policies so that making charges, discounts, refunds and tourist forms are handled in a consistent way. The objective is a VAT framework that keeps pricing transparent for customers.

FAQs

1. What VAT rate applies to retail gold jewellery in Dubai?

Most retail gold jewellery is subject to 5 percent VAT on the full invoice value. It also includes making and design charges.

2. When is gold treated as investment precious metal for VAT?

Gold qualifies as investment precious metal when purity is at least 99 percent and the bar or coin trades on global bullion markets, allowing a zero-rated supply.

3. Are tourists charged VAT on gold purchases in Dubai?

Yes. Tourists pay 5 percent VAT at purchase but can claim a refund later under the Tax Refund for Tourists Scheme.

4. How does the reverse charge mechanism work for gold traders?

For qualifying B2B supplies of precious metals, the recipient accounts for output VAT instead of the supplier, improving cash flow when conditions in FTA guidance are met.

5. Why do invoices need to differ from jewellery from bullion?

Different VAT treatments apply to jewellery and investment bullion. So, invoices and records must clearly show what was supplied and which VAT rule was applied.