Gold holds a unique position in the UAE, where it is not only part of culture but also a centerpiece of trade. With millions of visitors shopping for gold in Dubai and other Emirates, one question often arises: Is there VAT (Value Added Tax) on gold in the UAE? The answer depends on the type of gold, its purity, and the nature of the transaction.
Standard VAT on Gold Jewelry
In the UAE, most gold jewelry and decorative pieces are subject to the standard 5% VAT. This includes gold items with purity below 99%, such as 22K and 18K jewelry. The VAT also applies to making charges, which are added for craftsmanship and design. For customers purchasing jewelry in retail shops, this 5% VAT is almost always included at checkout.
Zero-Rated Gold – Investment-Grade Purity
Not all gold falls under standard VAT. The UAE provides zero-rated VAT (0%) for investment-grade gold, which is defined as gold with 99% or higher purity. This includes gold bars, bullion, and specific coins. Zero-rated means the transaction is taxed at 0%, provided certain conditions are met. This rule applies mainly when both buyer and seller are VAT-registered entities.
Reverse Charge Mechanism (RCM) in B2B Transactions
For business-to-business (B2B) transactions involving gold, the Reverse Charge Mechanism often applies. Instead of the seller charging VAT, the buyer accounts for it in their VAT return. This system reduces the cash flow burden and ensures smooth trade among VAT-registered companies. It has been particularly effective in Dubai, a hub for global gold exchange.
New Regulatory Updates in 2025
In February 2025, the UAE introduced Cabinet Decision No. 127/2024, expanding VAT rules for gold and precious metals. The decision clarified which items qualify for zero-rating and expanded the Reverse Charge Mechanism to cover more categories, including precious stones and certain jewelry transactions. These updates strengthen transparency and align the UAE gold market with international best practices.
Why VAT Matters for Gold Buyers
For individual shoppers, VAT ensures regulated and transparent pricing across all gold shops. Customers can clearly see the added VAT on invoices, reinforcing trust in the market. For businesses and large traders, VAT rules provide a structured system that balances international standards with the UAE’s position as a global gold hub.
Yes, there is VAT on gold in the UAE, but the rate depends on the type and purity of gold. Jewelry and items below 99% purity face the standard 5% VAT, while investment-grade gold may qualify for zero-rated VAT under specific conditions. With the addition of the Reverse Charge Mechanism and updated regulations in 2025, the UAE continues to ensure trust and clarity in its gold market.
FAQs
1. Is gold jewelry subject to VAT in the UAE?
Yes. Most gold jewelry is taxed at 5%, including making charges.
2. What type of gold is zero-rated in VAT?
Gold of 99% purity or higher, such as bullion and certain coins.
3. How does the Reverse Charge Mechanism work?
In B2B transactions, the buyer accounts for VAT instead of the seller charging it.
4. Did VAT rules for gold recently change in the UAE?
Yes. In 2025, new regulations expanded zero-rating and clarified Reverse Charge Mechanism rules.