Blitz Bureau
THE United Arab Emirates (UAE) has announced new value-added tax (VAT) rules for registered gold and diamond dealers, aimed at boosting the sector’s growth and aligning with global best practices. 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 Ministry clarified that 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.
This expansion, under the conditions outlined in Cabinet Decision No. (127) of 2024, aims to bring significant benefits to the precious metals and precious stones trading sector in the country, the MoF said.
This is a step in the right direction, it added, reflecting the Government’s ongoing commitment to supporting the precious metals and gemstones trading sector in the country. With these improvements to VAT regulations, the MoF reaffirms its commitment to creating a strong regulatory framework that supports business growth and prosperity while keeping abreast of global best practices.
This change offers a significant advantage for businesses trading in precious metals and stones. It will make it easier for them to navigate VAT regulations and focus on their core operations.
