VAT on Gold in the UAE – Jewellery, Investment Gold, Reverse Charge and Tourist Refund

VAT on gold in the UAE: the basic rules

The UAE introduced VAT at a single standard rate of 5% on 1 January 2018, administered by the Federal Tax Authority. Gold was not exempted; instead the law created three treatments depending on what is sold and to whom:

• Gold jewellery sold to consumers: standard-rated at 5% on the full price, including the metal, the making charge and any stones.
• Investment gold: zero-rated when it is of a purity of 99% or more and in a form tradable in bullion markets, such as bars and most bullion coins.
• Gold and gold jewellery traded between VAT-registered businesses: subject to a reverse-charge mechanism, so the buyer accounts for the VAT rather than paying it to the seller.

Because the metal price is set globally and the Dubai gold rate is simply that price in dirhams, VAT is the main tax layer a shopper in the UAE meets; there is no import duty on gold and no separate luxury tax. That combination is the reason the total price in Dubai is lower than in countries that add customs duty and higher sales tax. Rates and thresholds quoted here reflect the rules as generally understood; the FTA's published guidance is the authority if anything changes.

VAT on gold jewellery: taxed on the full invoice

For a necklace, bangle, ring or set, VAT is 5% of the taxable amount, and the taxable amount is everything the shop charges: metal value plus making charges plus stones. It is not charged on the metal alone, and the making charge is not a separate zero-rated service. The formula is:

Worked example: a 22K necklace with a metal value of AED 10,000 and a making charge of AED 800 has a subtotal of AED 10,800. VAT is 5% of that, AED 540, and the total is AED 11,340. If the same necklace carried AED 1,500 of making charges, VAT would be AED 575 and the total AED 12,075, which shows why negotiating the making charge also reduces the tax.

Shops must show VAT as a separate line on a tax invoice with their tax registration number (TRN). A quote given as "all inclusive" should still be broken down on request. Pieces of 18K, 21K, 22K and even 24K jewellery (for example a 24K chain or a decorative coin pendant) are all standard-rated: the test is whether the item is jewellery, not its karat. Our making charges guide explains how the labour line is built, and the 22K rate page shows today's metal rate that the first line of the invoice is based on.

Investment gold is zero-rated: bars, coins and the 99% test

The UAE zero-rates the supply of investment precious metals: gold, silver and platinum of a purity of 99% or more that is in a form tradable in global bullion markets. In practice that covers refinery bars from 1 g to 1 kg, kilobars, and bullion coins such as the common one-ounce sovereign-mint coins, when they are sold on their metal value. Zero-rated means VAT is charged at 0%, so the buyer pays nothing on top of the dealer's price and the dealer can still recover its own input VAT.

The purity threshold is the practical dividing line. A 24K bar stamped 999 or 999.9 qualifies; a 22K coin (916) does not, and neither does a 24K item that is clearly a piece of jewellery or a decorative object rather than a tradable bullion product. Gift-boxed coins with heavy packaging and design premiums are usually still zero-rated if they are bullion coins, but collector pieces priced far above metal value may be treated as standard-rated goods; ask the dealer how an item is invoiced.

For residents saving in gold, this rule makes bars and coins the cheapest route per gram: no VAT, no making charge, only a small premium over spot. The gold bars price in Dubai page lists common sizes and the 24K gold rate shows the metal value they are priced from. Keep the dealer's invoice and the assay card; when you sell, the buyer will not charge VAT either, but will want proof of the bar's origin.

The reverse charge for gold and diamond traders (B2B)

Dubai is a wholesale hub where gold passes between refiners, bullion dealers, manufacturers and retailers many times before it reaches a consumer. If 5% VAT were paid in cash at every step, traders would carry large sums of recoverable tax and the UAE would be less competitive than other bullion centres. To avoid that, a Cabinet Decision in 2018 introduced a reverse-charge mechanism for supplies of gold, diamonds and products where the principal component is gold or diamonds, when both parties are VAT-registered and the buyer intends to resell or use the goods in manufacturing.

Under the reverse charge the seller does not charge VAT on the invoice. Instead the buyer declares both the output VAT and the matching input VAT in its own return, so the net cash effect is usually zero. The seller must obtain a written declaration from the buyer confirming registration and intention, and keep it with the invoice. Later decisions widened the mechanism to cover a broader range of precious metals, precious stones and jewellery made from them; because the scope has been expanded over time, traders should rely on the current Cabinet Decision and FTA guidance rather than a summary.

What this means for an ordinary shopper: nothing changes at the counter. The reverse charge applies only between registered businesses. If you are a small jeweller or a trader buying from the Dubai gold wholesalers, make sure your supplier has your TRN and declaration on file, or VAT will be charged in the normal way.

Tourist VAT refund on gold: how the Planet scheme works

Visitors to the UAE can reclaim VAT on jewellery through the national tax-refund scheme operated by Planet on behalf of the FTA. The conditions and steps:

• Eligibility: you are a tourist (not a UAE resident) aged 18 or over, buying from a retailer registered in the scheme; most gold shops in the souks, the Gold & Diamond Park and the malls are.
• Minimum spend: AED 250 on a single tax invoice.
• At the shop: show your passport (or GCC ID where accepted) so the retailer issues a digital tax-free tag linked to your invoice.
• Timing: the goods must leave the UAE within 90 days of purchase, unused.
• At departure: validate the purchase at a Planet counter or kiosk at the airport, port or land border before you leave; have the jewellery and invoice available for inspection, and do this before checking in bags that contain the gold.
• Payout: choose a refund to card or cash. Planet deducts an administration fee, so you receive most of the VAT rather than all of it.

Investment bars carry no VAT, so there is nothing to reclaim on them. A UAE resident cannot use the scheme even when travelling. If you later return to India or another country, remember that your home customs duty is a separate matter; see carrying gold from Dubai to India for the allowances.

Worked examples: VAT on different gold purchases

The table below applies the rules to typical purchases. Amounts are illustrative round numbers, not today's prices; use the live rate and the calculator to build your own figures.

Two points stand out. For jewellery, the only ways to reduce VAT are to reduce the making charge or to be a tourist who claims it back. For saving, a zero-rated bar beats a 24K chain by the whole 5% plus the making charge. The gold calculator gives the metal value for any weight so you can fill in the first column yourself.

Is gold tax-free in Dubai? Common misconceptions

"Gold is tax-free in Dubai." Only partly. There is no import duty and no income or capital-gains tax for individuals, and investment bars are zero-rated, which is why the phrase survives. But jewellery carries 5% VAT on the full invoice.

"VAT is only on the making charge." No. The taxable amount is the whole invoice: metal, labour and stones.

"24K jewellery is zero-rated because it is 999." No. Purity is necessary but not sufficient; the item must be investment gold in a tradable bullion form. A 24K chain is jewellery and is taxed.

"Residents can get the tourist refund if they are flying out." No. The scheme is for non-residents only.

"Shops in the souk do not charge VAT if I pay cash." A registered shop must charge and remit VAT regardless of payment method. A shop offering to skip it is offering an invoice you cannot rely on for resale, insurance or customs.

"Selling my old gold triggers VAT." A private individual selling personal jewellery to a shop is not making a taxable supply; the shop may apply its own VAT rules when it resells. Read the selling guide for how buy-back prices are set.

"Gold Souk prices include VAT." Usually the rate board shows the metal rate excluding VAT and the final invoice adds 5%; always ask whether a quote is before or after tax.

Residents, businesses and record-keeping

For residents, VAT on gold is a cost of buying jewellery, not an ongoing tax: there is no annual declaration, no tax on holding gold and no tax on a later private sale. The practical advice is to keep every tax invoice. It proves the weight, karat and price for insurance, supports a buy-back or exchange at the day's rate, and shows customs officers abroad what you paid and when. If you buy bars for savings, the invoice and assay card are what the next buyer will ask for.

For businesses, gold is a sector the FTA watches closely because of its value and the reverse-charge rules. Jewellers must register once their taxable turnover crosses the mandatory threshold, issue compliant tax invoices, distinguish standard-rated, zero-rated and reverse-charge supplies in their returns, and hold the buyer declarations that support reverse-charge treatment. Retailers in the tourist refund scheme also need the Planet system at the till. Penalties for errors are administrative but can be substantial, so most traders use an accountant familiar with the gold sector.

Everything on this page is general information, not tax advice. The authoritative sources are the Federal Decree-Law on VAT, its Executive Regulation and the Cabinet Decisions on gold and diamonds, all published by the FTA, and a registered tax agent for anything specific. For the shopping side, the buying guide puts VAT in the context of the whole invoice.