UAE announces New VAT rules for gold, diamond traders

A new UAE rule on the application of value-added tax (VAT) will be implemented for registered dealers of gold and diamonds. The Ministry of Finance (MoF) has expanded its ‘reverse charge mechanism’ to include businesses that are trading precious metals and stones.

Under the ‘reverse charge’ scheme, the supplier will no longer be responsible for charging and collecting VAT on goods that are covered by the Cabinet decision. Instead, the buyers will be responsible for calculating and declaring the VAT on their purchases of these goods and reporting it in their VAT return. This means buyers will now pay the tax directly to the government.

The reverse charge mechanism’s scope now covers precious metals (gold, silver, palladium, and platinum), precious stones (natural and manufactured diamonds, pearls, rubies, sapphires, and emeralds), as well as jewellery made from any of these precious metals or stones, provided that the value of the precious metals or stones exceeds the value of other components.