UAE Precious Metals VAT Changes: Everything You Need to Know

Recent trade data shows the UAE exported around 47 billion dollars worth of gold, making it one of the world’s largest gold hubs. 

Since 2018 a 5 percent VAT applies to most goods and services. This includes activity linked to gold and jewellery under the federal system for VAT in Dubai and the wider UAE. 

New decisions on precious metals and stones now reshape who charges VAT, who accounts for it and how reverse charge works in this sector.

Why Precious Metals VAT Matters Now

Gold and jewellery traders have always faced tight scrutiny because of high values and fraud risk. Early on, Cabinet Decision 25 of 2018 brought in a domestic reverse charge for certain B2B supplies of gold and diamonds between registrants. 

In 2025, Cabinet Decision 127 of 2024 replaced that framework and expanded the reverse charge mechanism to a wider list of precious metals and stones, including jewellery where the precious content dominates.

For traders, refiners and wholesalers, this change reduces cash-flow pressure and narrows room for carousel fraud, yet it also raises documentation expectations. The latest FTA Public Clarification VATP043 explains how the mechanism should work in day-to-day transactions.

Core VAT Rules for Gold in the UAE

Investment Grade Bullion

Under the Executive Regulation, investment precious metals are gold, silver or platinum that are at least 99 percent pure and in a form traded on global bullion markets. 

Supplies and imports of such metal are zero rated, so VAT is charged at 0 percent, while input tax on related costs can normally be recovered in full. This is the heart of investment grade gold VAT UAE treatment and continues after the recent changes.

Jewellery And Retail Products

Finished jewellery, coins below the bullion purity threshold and mixed items remain standard rated at 5 percent when sold to consumers. The FTA has clarified how making charges for gold and diamond jewellery are treated, so jewellers must separate metal value and workmanship correctly on invoices. 

For retail shoppers, this structure means VAT usually appears on the full invoice. However, some business buyers can recover the tax subject to their own status.

Scrap Gold And Old Jewellery

Scrap, broken pieces and old jewellery sold for remelting normally fall outside the zero-rated bullion rules because purity, form and market conditions differ. Guides on UAE VAT on gold confirm that such supplies usually attract 5 percent VAT, unless they qualify for reverse charge between registrants under the new decision.

Expansion of the Reverse Charge Mechanism

The domestic reverse charge mechanism shifts VAT accounting from the supplier to the VAT-registered buyer. If all conditions are met, the supplier issues a tax invoice with no VAT. The buyer then reports both output and input VAT in the same return under normal recovery rules.

Cabinet Decision 127 of 2024 and VATP043 extend this to more precious metals and stones, replacing Decision 25 of 2018 and adding new declaration and eligibility conditions.

Under the updated precious metals VAT rules in the UAE many B2B deals between registered traders now run under reverse charge. Retail sales to customers who are not registered still carry the normal 5 percent VAT.

Conditions to Use the Reverse Charge

To apply the new mechanism correctly, several points must be satisfied.

• Both supplier and recipient must be VAT registered in the UAE on the date of supply.
• The goods must fall within the new definition covering precious metals, stones and jewellery where precious content dominates.
• The recipient must give the supplier a written declaration confirming registration and that the goods are acquired for resale or further processing, not for personal use.
• The tax invoice must clearly state that reverse charge applies and omit VAT from the amount charged.

If any condition fails, the supplier should treat the transaction under normal VAT rules and charge 5 percent where applicable.

Practical Impact for Dubai Gold and Jewellery Businesses

Day to day, the revised rules reshape three processes. 

• First, finance teams classify each stock line by purity, form and customer type. The same item can be zero rated, standard rated or under reverse charge depending on how it is traded. 
• Second, counterparty onboarding needs tighter checks, with VAT registration proof and reverse charge declarations stored and refreshed, because suppliers must confirm buyer status before using reverse charge invoices. 
• Third, ERP and POS systems need tax codes and mapping so movements between bullion, wholesale and retail do not misstate VAT.

Overview of Scrap Gold VAT Rules in Dubai

When Reverse Charge Can Apply To Scrap Gold

For refiners and scrap dealers, scrap gold VAT in Dubai rules deserve special attention. Scrap supplies between VAT registered businesses can fall under reverse charge when they meet the definition of goods under Cabinet Decision 127. The buyer must also give the required declaration.

Buying Scrap Gold From Individuals And Small Traders

Where scrap is bought out of individuals or unregistered small traders, the normal consumer-facing rules apply. Dealers pay the price agreed and cannot apply reverse charge to those purchases. When that scrap is later sold to registered refiners or manufacturers, dealers may use reverse charge if conditions are met or charge 5 percent otherwise.

Records And Stock Pools For Scrap Gold VAT Control

Keeping clear purchase records, weight certificates and test results supports VAT positions when the FTA reviews these chains. For businesses that process a mix of retail buy-backs and wholesale scrap flows, separate stock pools often make VAT control easier.

How Arnifi Supports Precious Metals VAT Compliance

Firms active in gold, jewellery and precious stones now balance normal VAT rules with zero rating for bullion and the extended reverse charge mechanism. 

Arnifi works with traders, wholesalers and refiners that want calm audits and simple processes. Engagements usually start with a stock and transaction map. This map matches product categories to the right VAT treatment, including UAE VAT on gold for bullion, jewellery and scrap.

The team then reviews contracts, tax invoices and system tax codes to ensure they line up with Cabinet Decision 127, VATP043 and the Executive Regulation.

 When gaps appear, Arnifi helps design new onboarding steps and declaration templates plus reconciliations. This support helps finance teams explain their approach clearly during FTA reviews.

Final Perspective for Dubai’s Gold Market

The UAE’s precious metals sector continues to play a global role, yet it now sits inside a more detailed VAT framework. Zero-rated investment bullion, standard-rated jewellery and reverse charge chains between registrants each have strict conditions. 

Businesses that treat these rules as part of core operations, not simply as tax formality, usually see fewer disputes and smoother cash flow. For them, VAT in Dubai becomes a managed, predictable cost instead of an open risk in already thin-margin trading.

FAQs

What VAT rate applies to investment grade gold in the UAE?

Investment grade bullion that is at least 99 percent pure and traded in recognised bullion form is zero rated. Related input tax is usually recoverable when normal conditions are met.

How does VAT work on retail gold jewellery in Dubai?

Retail jewellery and coins below bullion purity are standard rated at 5 percent. VAT is charged on the final selling price, including metal value and making charges.

What changed with the new reverse charge rules for precious metals?

Cabinet Decision 127 of 2024 widened reverse charge to more precious metals, stones and jewellery transactions between registrants. Suppliers stop charging VAT, and registered buyers self-account in their returns.

Are scrap gold sales in Dubai covered by reverse charge?

Scrap gold traded between VAT-registered businesses can fall under reverse charge when conditions are satisfied. Purchases out of unregistered individuals remain outside reverse charge and follow normal consumer-facing VAT rules.

Why should gold traders review invoices and systems after these changes?

Correct VAT coding now depends on product type, customer status and documentation. Clean invoices and updated systems reduce assessment risk and keep precious metals VAT compliance manageable.