VAT on Gold in UAE 2025

Introduction

As we all know, the UAE has always been famous for gold trade, and Dubai is also called as “City of Gold” because of its active jewellery markets and global reputation. However, since the Value Added Tax (VAT) was introduced in 2018, the most common question arises from business owners and consumers was:

“Do we have to pay VAT on gold jewellery in the UAE?”

The simple answer is yes, but it depends on the purity/type of gold and the nature of the transaction.

In this blog, we’ll explain how VAT applies to different types of gold including jewellery, gold bars, and making charges and also explains what both gold traders and tourists need to know to stay compliant with VAT rules and for getting VAT refunds.
 
 Legal Background

The VAT applies to gold trade in the UAE is based on the several laws and decisions governed by:

• Federal Decree-Law No. 8 of 2017 on Value Added Tax
• Cabinet Decision No. 25 of 2018 on the Reverse Charge Mechanism for Gold and Diamonds,
• FTA Public Clarification VATP016 on “Gold and Diamonds: Wholesale and Retail Sector.”

These regulations make it clear that not all gold is treated as same way for VAT purposes. The rules will differ depends on whether the gold is investment grade, jewellery, or part of gold related services. Each has its own VAT treatment.

VAT on Gold Jewellery in UAE

VAT on Gold jewellery in the UAE is generally subject to 5% VAT at the retail level. This VAT applies to the total invoice amount, means when you buy gold ornaments or jewellery VAT is added on the total price, which includes:

• Value of the gold, and
• The making or design charges

Example:

If a bracelet costs AED 5,000 for gold and AED 500 making charges, the total VAT would be:

→ 5% × AED (5,000 + 500) = 5% ×5,500 = AED 275

So, the total amount the customer pays is AED 5,775 in total.

Why is VAT charged on jewellery?

Gold jewellery is treated as a finished product, just like clothes, electronics, or cars sold at retail. It’s not treated as an investment like gold bars or coins. Therefore, it does not qualify for VAT exemption or zero rating.

VAT on Gold Making Charges

Many person’s have confusion about whether making charges attract VAT separately.

Yes, gold making charges are taxable in UAE VAT.

When you buy gold jewellery, the price isn’t just for the gold. The jeweller includes a making charge for the design, craftsmanship and labour which turns the plain gold into a finished product. As this process adds value, VAT is charged to the entire invoice not just for the gold.

Guidelines for jewellers to stay compliant:

Always provide a proper tax invoice including:

• The TRN of seller
• Detailed breakdown of gold value and making charges
• Total VAT charged

This keeps your business not only to stay compliant also supports input VAT recovery for registered traders.

VAT on Gold Bars and Investment Gold

In the UAE normal VAT rate is 5%. But gold should treat differently depending upon what kind of gold it is. Some gold is considered Investment-grade gold means mainly bought for savings or investing, not for wearing.

VAT Treatment for Investment Gold

According to Cabinet Decision No. 25 of 2018, the supply of “investment precious metals” — gold, silver and platinum with purity of 99% or more and that is tradeable in global bullion markets is subject to zero rate under VAT. This means no VAT is charged at the point of sale, but the supplier can still recover the input VAT on related costs.

In order to qualify for zero rating, the gold must:

• Have a minimum purity of 99%
• Be in a tradeable form, such as bullion bars or coins traded internationally

Non-zero-rated gold:

• Jewellery (as it’s not investment-grade)
• Gold below 99% purity
• Gold used for industrial purposes

In summary:

 Reverse Charge Mechanism (RCM) for Gold and Diamonds

To avoid “tax cascading” in the wholesale trade of gold and diamond between registered dealers, the UAE brings a reverse charge mechanism (RCM). Under this, the buyer bears the VAT liability instead of seller. So businesses report both input and output VAT without paying extra cash. By introducing RCM, the UAE facilitates smoother trade flow in precious metals by reducing unnecessary cash outflows for VAT.
 
Under this:

The supplier will not charge any VAT on sales invoice for gold, diamond, other precious metals and stones when selling to a VAT-registered buyer.

• The buyer of gold himself account for VAT on behalf of the supplier above the purchase price
• The buyer can also recover input VAT on these purchases, subject to conditions for input tax recovery are met

Example:

A wholesaler supplies raw gold with value of AED 1,000,000 to a VAT-registered jeweller.

• No VAT is added to the invoice.
• The jeweller records both output VAT (5%) and input VAT (5%) in the same return, resulting in no cash outflow.

Key Condition:

Both supplier and buyer must be FTA VAT-registered and engaged in resale or manufacture of gold or diamonds.
 
VAT Refund for Tourists on Gold Purchases

One of the major attractions for tourists is the ability to claim VAT refunds on gold purchases when departing the UAE.

Through the Planet Tax Refund System, visitors can recover VAT paid on gold jewellery and other eligible goods.

Eligibility Conditions:

• Purchase must be made from stores which registered with FTA under Tourist refund scheme and these stores must display the “Tax refunds for tourists” logo.
• To qualify for the VAT refund, the minimum spend on a single invoice must be at least AED 250.
• The purchased goods (including gold jewellery) must be physically carried from the UAE within 90 days from the date of purchase. The tourists must show the items along with the original invoice.
• The passport must be presented at the airport refund counter along with the original invoice and items

Refunds are usually given by cash or returned to your credit card after a small processing fee.
 
VAT on Import and Export of Gold

• Import of gold bullion: Gold bullion with 99% or more purity is zero rated for VAT when imported by registered dealers, no VAT was charged on import which allows dealers to import gold bullion without VAT cost. Proper import documentation and customs clearance documents should kept for audit and compliance purposes.
• Import of jewellery for resale: Gold jewellery imported for resale purpose is subject to reverse charge mechanism for VAT, which simplifies the VAT registered businesses to avoid cash flow issues related to VAT payment.
• Export of gold (investment or jewellery):
•  - Zero rated if the gold is physically exported outside UAE.
•  - Exporters must maintain export documents including customs exit proofs, shipping documents and commercial invoices which all proves the goods have left the UAE within the time frame and for audit and compliance purpose.

 
Compliance Requirements for Gold Traders

Gold traders in the UAE must follow the strict VAT and anti-money laundering (AML) rules because the gold business is risky and can be used for tax evasion or money laundering. FTA has set specific rules and VAT treatment for overall compliance purpose, not following these rules will lead to serious penalties.

Gold traders must:

• Maintain detailed records of all gold and precious metal transactions for at least 5 years. This includes customer information, invoice details, transaction amounts, supporting documents and proof of payments.
• Before applying VAT under reverse charge mechanism for B2B transactions, traders should verify customer’s TRN is valid with FTA.
• Gold dealers was falling under UAE’s DNFBP (Designated Non-Financial Businesses and Professions) so they must follow AML rules, carry out customer due diligence, watch for suspicious or unusual transactions and report them.
• A proper invoice must comply with Article 59 of VAT Executive Regulations which should be named tax invoice showing the seller’s and buyer’s name, address, TRN,  date and invoice number, description and quantity of goods, VAT rate and amount, specific note if reverse charge applies (for B2B supplies of investment gold).

 
 
Non-compliance with VAT and AML requirements can lead to:

• Administrative penalty of AED 10,000 to AED 50,000 and
• Possible suspension of dealers VAT registration and further any action from AML regulators.

Real Example

Case:

A Dubai jewellery retailer sold AED 2 million worth of gold ornaments and AED 150,000 in making charges during a VAT period.

Calculation:

Total taxable amount = AED 2,150,000

Output VAT = AED 107,500

Input VAT on purchases = AED 98,000

Net VAT payable = AED 9,500       

Meanwhile, a wholesaler supplying gold bars (99.9% purity) under RCM reported no VAT payable, as the transaction qualified as zero-rated investment gold.

Summary Table

How Flying Colour Can Help

At Flying Colour Tax Consultant LLC, we assist gold traders, jewellery manufacturers, and bullion dealers with:

• VAT registration and issuing a Tax registration number (TRN)
• RCM compliance and VAT return filing.
• Verifying eligibility for zero rated treatment on investment-grade gold.
• Preparing for FTA audits and organizing required documentation
• Managing VAT refunds and reconciliation for exports and tourist sales.
   

To learn more about VAT on Gold in UAE 2025, book a free consultation with one of the Flyingcolour team advisors.

Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.