UAE VAT Law 2025: New Rules for Gold, Diamonds & Precious Metals Trading
Latest updates to UAE’s VAT reverse charge mechanism for precious metals and stones. Learn how Cabinet Decision 127 affects gold and diamond traders in 2025.
By Vadim Kouznetsov, published
The UAE Ministry of Finance has rolled out significant changes to its Value Added Tax (VAT) regulations through Cabinet Decision No. (127) of 2024, marking a substantial shift in how precious metals and stones are taxed between registered businesses.
Key Changes to UAE’s VAT Framework
The updated legislation brings fresh provisions for VAT-registered businesses dealing with precious metals and stones. Under these new rules, sellers no longer bear the responsibility of charging or collecting VAT from other registered customers. Instead, buyers must now handle the VAT calculations and reporting in their tax returns.
Materials Covered Under the New VAT Rules:
- Precious Metals
- Gold
- Silver
- Palladium
- Platinum
- Precious Stones
- Natural and manufactured diamonds
- Pearls
- Rubies
- Sapphires
- Emeralds
- Jewellery
- Items incorporating these precious materials
- Applicable when precious components exceed other materials in value
Understanding the Reverse Charge Mechanism
The reverse charge mechanism represents a strategic shift in VAT handling. This system places the responsibility of VAT reporting and payment on the buyer rather than the seller. While sellers don’t charge VAT directly, they must verify that buyers meet the necessary qualifications for this mechanism.
Benefits for UAE’s Trading Sector
This regulatory update delivers several advantages:
- Reduced administrative workload for businesses
- Streamlined VAT compliance procedures
- Enhanced support for trading operations
- Improved competitive position in global markets
Implementation and Future Outlook
The Ministry of Finance’s decision aligns with international best practices while supporting local business growth. This update repeals Cabinet Decision No. (25) of 2018, presenting a refreshed framework for precious metals and stones trading.
Impact on Business Operations
Companies trading in precious metals and stones will experience:
- Simplified tax reporting procedures
- Reduced administrative requirements
- Greater focus on core business activities
- Enhanced trading efficiency
The Ministry emphasises that these changes demonstrate the government’s dedication to fostering a thriving trading environment while maintaining regulatory excellence.
This article was last updated on January 11, 2025, reflecting the latest changes in UAE VAT legislation.
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