Gold remains one of the UAE’s most trusted and profitable investment assets. With Dubai widely known as the “City of Gold,” the government has introduced clear Value Added Tax (VAT) rules on gold to ensure transparency, strengthen compliance, and boost investor confidence.
Whether you are a jeweler, an investor, or planning a new company setup in Dubai to trade in gold, understanding how VAT applies to your business is essential.
VAT on Gold in the UAE: The Basics
B2B Gold Transactions – High-purity gold, silver, and platinum (99%+) are VAT-exempt when traded between VAT-registered businesses.
Consumer Sales – End-users purchasing gold still pay the standard 5% VAT.
Key Benefits of VAT Exemption on Gold in the UAE
The recent VAT exemption on gold transactions offers several advantages for businesses and the UAE economy:
Boosts Market Competitiveness – Reduced costs make gold trading more appealing.
Encourages High-Volume Trading – Lower tax burdens attract international investors.
Strengthens the UAE Economy—Supports Dubai’s position as a global hub for precious metals.
Eligibility Criteria for Gold VAT Exemption in UAE
- High-Purity Metals: Only gold, silver, and platinum with 99% purity or higher qualify.
- Investment-Grade Products: Eligible items include gold bars, coins, and bullion that meet the purity standards.
- Registered Businesses: The exemption applies strictly to B2B transactions between VAT-registered suppliers and recipients within the UAE.
Documentation and Compliance for Gold VAT Exemption in UAE
To benefit from the VAT exemption on gold transactions, businesses must follow strict compliance rules:
- Maintain Detailed Records: Keep accurate transaction records, including VAT invoices and proof of exemption eligibility.
- VAT Registration Proof: Both buyer and seller must be VAT-registered, with proper documentation to verify eligibility.
- Follow UAE Tax Laws: Adhere to all UAE tax regulations to remain compliant and avoid penalties.
The VAT exemption on high-purity gold, silver, and platinum also applies to import and export transactions, making cross-border trade smoother. This policy enhances Dubai’s appeal as a global hub for precious metals.
By reducing transaction costs, the exemption strengthens the UAE’s competitive edge in the international market, attracting more investors and businesses. Entrepreneurs considering a low cost business setup in Dubai or new company setup in Dubai can leverage this advantage to maximize profitability in gold trading.
Exploring the Gold Market in UAE: Essential Tips
For businesses and investors in Dubai’s gold sector, understanding VAT exemption policies is key to maximizing benefits:
- Stay Updated on Tax Regulations: VAT rules on gold in UAE may change. Regularly consult official sources or tax advisors to remain compliant.
- Maintain Document Compliance: Ensure eligibility criteria are met and keep detailed records to fully benefit from VAT exemptions.
- Monitor Market Trends: Track how the exemption affects gold demand and pricing to make informed trading and investment decisions.
In 2022, the Federal Tax Authority (FTA) issued clarification VATP029 on how VAT applies to gold-making charges, impacting gold jewelry transactions. Businesses must distinguish between single composite supplies and multiple supplies:
- Single Composite Supply: When gold and making charges are sold at one combined price, VAT is applied under the Reverse Charge Mechanism (RCM), provided gold is the main component.
- Multiple Supplies: If making charges are billed separately, VAT at 5% applies to the services, while the gold portion may fall under RCM.
- Exemptions: Exports and investment-grade gold meeting eligibility criteria remain VAT-exempt, enhancing their appeal in international trade.
The buyer (recipient) must be VAT-registered.
The gold must be intended for manufacturing or resale.
Suppliers must verify the buyer’s VAT status.
If these conditions are met, the buyer accounts for VAT instead of the supplier.
- High-Purity Gold Only: VAT exemption applies to gold, silver, and platinum with 99%+ purity, and only for B2B transactions between VAT-registered businesses.
- Documentation Compliance: Accurate records and meeting eligibility criteria are essential to benefit from the exemption.
- Reverse Charge Mechanism: Applies only to gold items; related services like making charges are taxable unless treated as a single composite supply.
- Investment-Grade Gold (99%+ purity): Gold bullion and other investment-grade products are zero-rated, allowing suppliers to recover input VAT while charging 0% to buyers.
- Gold Jewellery & Lower-Purity Gold: Items below 99% purity, including jewelry and decorative gold, are subject to the standard 5% VAT.
The VAT exemption on gold transactions in the UAE offers significant benefits for businesses and investors, strengthening the country’s position as a global hub for gold trading. By staying informed about eligibility criteria, compliance requirements, and the updated gold VAT rates in Dubai and across the UAE, traders can maximize tax savings and boost profitability.