Dubai has earned a global name for its glittering gold market, but many people are often unsure about VAT on gold in UAE. Whether you’re a tourist picking up jewelry at the gold market or a trader dealing in bulk, it’s important to know how the system works. The VAT on gold in UAE and the overall gold tax in UAE depends on the type of gold, its purity, and who’s involved in the transaction. Understanding these basics will help you shop or trade with clarity and confidence.
What VAT on Gold in UAE?
VAT on gold in UAE is charged at the standard 5% rate, just like most goods and services in the country. This tax is applied at every stage of the supply chain, from suppliers to retailers, and the final cost is borne by the consumer. However, there are special rules for gold. Investment-grade gold with a purity of 99% or higher may qualify for zero-rated VAT if certain conditions are met, mainly for business-to-business (B2B) transactions.
In these cases, the Dubai gold tax is handled through a reverse charge mechanism, where the buyer reports the VAT instead of the seller. This reduces upfront costs and helps businesses manage cash flow better. For individual buyers, including tourists shopping for jewelry in Dubai, the 5% VAT is included in the price, but tourists can claim a refund when leaving the UAE.
Advantages of VAT Exemption on Gold Tax in UAE?
VAT exemption for gold tax in UAE has many benefits for businesses, investors, and even consumers in the UAE market:
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Enhancing market appeal: Removing VAT on gold in UAE makes trading high-purity metals more attractive to investors and businesses.
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Boosting trading volume: Lower transaction costs encourage large-scale trades, strengthening Dubai’s position as a global hub for gold transactions.
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Driving economic growth: VAT exemption supports the UAE’s vision to lead the global gold market and enhance national economic progress.
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Simplifying business operations: Eliminating VAT-related expenses reduces costs for gold traders, making operations smoother and more profitable within the UAE.
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Increasing investor interest: Tax-free pricing strengthens gold’s image as a secure and rewarding investment option for global and regional investors.
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Helping consumers: Improved affordability of gold in UAE markets ensures buyers benefit from better pricing and greater access to precious metals.
Eligibility For VAT Exemption on Dubai Gold Tax
Not every gold transaction in the UAE qualifies for VAT exemption. Here’s when gold is exempt
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High-purity metals only: The exemption applies to gold, silver, or platinum that are at least 99% pure.
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Investment-grade products: Only gold bars, coins, and bullion that are tradable in international markets qualify. Gold jewellery does not qualify.
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Business-to-business transactions: The exemption is meant for deals between VAT-registered businesses in the UAE, not for retail sales to consumers.
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Purpose of purchase: The gold must be bought for resale or investment, not for making jewellery or for personal use.
For tourists buying gold in Dubai, there’s also a VAT refund option. To qualify, you must be a tourist (not a UAE resident), your purchase should be over AED 250* in a single transaction, and your passport must be from outside the GCC.
Required Documents for VAT exemption on VAT on gold in UAE
Below is the list of documents:
- Proper tax invoice
- Purity certificate confirming ≥99 % purity
- Proof of VAT registration for both buyer and seller
- Sales contracts clearly outlining the components and VAT treatment
- Import/export documents when relevant
Dhanguard can assist you with all steps in the VAT on gold in UAE documentation process, ensuring your business stays compliant and benefits from the exemption.
Gold Jewellery Making Charges and VAT in Dubai
In 2022, the FTA clarified VAT rules on gold jewellery. Gold tax in UAE applies differently depending on whether making charges are included in the price or billed separately, affecting both businesses and buyers.
Single Composite Supply
When gold jewellery is sold with making charges included in one price, it’s treated as a single composite supply. The total price is subject to tax on gold in UAE under the Reverse Charge Mechanism (RCM).
Multiple Supplies
If making charges are billed separately from the gold price, the supplier must charge 5% VAT on these services, while the gold component follows the tax on gold in Dubai rules under RCM.
Exemptions on Gold Exports
Investment-grade gold and certain exported jewellery are exempt from VAT. This reduces gold tax in UAE for international buyers, making exported gold more attractive in global markets.
Making Charges Explained
Making charges are labour or design fees added to gold jewellery. These charges vary by complexity, type of item, and retailer, and influence the total tax on gold in UAE a buyer pays.
Pricing Models in Dubai
Dubai jewellers charge making fees either as a flat rate per gram or as a percentage of the gold’s value. Both methods affect how tax on gold in Dubai is calculated for the final price.
VAT Refund for Tourists
Tourists can reclaim a portion of VAT paid on jewellery in Dubai. This reduces the effective tax on gold in Dubai, but local residents cannot claim this refund.
Conclusion
Understanding VAT on gold in UAE and the rules around Dubai gold tax is essential for both businesses and individual buyers.
If you're considering investing in pure gold or taking jewelry as a souvenir, it's essential to understand all the terms and conditions, documents, and tax charges involved to keep your money safe. VAT exemptions make gold trading more attractive, boost market activity, and support Dubai’s position as a global gold hub. With proper documents, updates, and adherence to rules and policies, businesses can operate freely. With Dhanguard, managing tax on gold in Dubai becomes easier, ensuring you maximize benefits and stay fully compliant in the UAE’s gold market.
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