4 May 2018
UAE: Gold and Precious Metal Traders Exempt from VAT Liability
Traders in diamonds and a number of 99% pure precious metals, including gold, silver and platinum, are to be exempt from the country’s 5% VAT charge. The exemption forms part of the country’s newly-adopted VAT Reversed Charge mechanism, which only relates to the wholesale trading of such materials, leaving retail jewellery transactions still subject to VAT.
Under the new regulations, 5% VAT payments will still be recorded in the accounts of both buyers and sellers of diamonds and precious metals, but no actual payment will be required. The move follows reports of a 50-60% year-on-year drop in wholesale demand for gold jewellery in the first three months of 2018, largely as consequence of the implementation of the 5% VAT charge as of 1 January this year.