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UAE VAT Fundamentals/Module 17: Gold, Precious Metals & Oil/Gas
6 min

Gold and Precious Metals — Investment Grade

VAT treatment of gold and precious metals: investment-grade metals are zero-rated, with a domestic reverse charge mechanism.

Gold and Precious Metals

Investment-Grade Precious Metals: Zero-Rated

The supply of investment-grade precious metals is zero-rated (0%). Investment-grade precious metals are:

  • Gold, silver, and platinum of 99% purity or higher
  • In the form of bars, coins, or ingots
  • Traded at international market prices (not fabricated into jewelry)

The supplier charges 0% VAT and can recover input tax on related costs.

Domestic Reverse Charge on Gold

For supplies of gold (including non-investment-grade) between registered businesses, a domestic reverse charge may apply:

  • The supplier does not charge VAT.
  • The recipient accounts for VAT (output and input) on their VAT return.
  • This applies to supplies of gold between registered businesses.

The reverse charge on gold is designed to prevent VAT fraud in the gold supply chain (missing trader fraud).

Jewelry and Fabricated Precious Metals

Jewelry and fabricated precious metals are standard-rated at 5%:

  • Gold jewelry
  • Silver jewelry
  • Watches with precious metal content
  • Decorative items made of precious metals

The jeweler charges 5% VAT and can recover input tax on materials and expenses.

Worked Example

A Dubai gold trader sells AED 1M of investment-grade gold bars (99.9% purity) to an international buyer. The supply is zero-rated — no VAT charged, input tax recoverable. If the same trader sells gold jewelry to a retail customer, the jewelry is standard-rated at 5%. If the trader sells non-investment gold to another registered business, the domestic reverse charge may apply.

Practical UAE example

**Dubai Gold Souk**: A gold dealer sells AED 500,000 of investment-grade gold bars (99.9% purity) to a registered investor. Under the domestic reverse charge, the dealer does not charge VAT — the investor accounts for 5% output tax (AED 25,000) and 5% input tax (AED 25,000) on their VAT return. If the dealer sells gold jewelry to a walk-in customer, the jewelry is standard-rated at 5%.

Key takeaways

  • Investment-grade precious metals (99%+ purity) are zero-rated.
  • Domestic reverse charge applies to gold supplies between registered businesses.
  • Jewelry and fabricated precious metals are standard-rated at 5%.
  • The reverse charge on gold prevents VAT fraud in the supply chain.

Authoritative sources

Federal Decree-Law No. 8 of 2017 on Value Added Tax

United Arab Emirates — Federal Tax Authority · The VAT Law — Articles 1 to 82 (as amended by Federal Decree-Law No. 18 of 2022)

Effective: 1 Jan 2018Verified: 5 Oct 2026View source

Cabinet Decision No. 52 of 2017 on the Executive Regulations of the Federal Decree-Law No. 8 of 2017 on VAT

United Arab Emirates — Cabinet / Federal Tax Authority · Executive Regulations (as amended by Cabinet Decisions No. 46/2020, 24/2021, 88/2021, 99/2022, 100/2024, and 100/2025)

Effective: 1 Jan 2018Verified: 5 Oct 2026View source

FTA — VAT Guides, References & Public Clarifications

UAE Federal Tax Authority · Taxable person guides, tax invoice guides, input tax guides, designated zones, real estate

Effective: 1 Jan 2018Verified: 5 Oct 2026View source
Knowledge check

1. What is the VAT treatment of investment-grade gold bars (99.9% purity)?

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This lesson is general educational content, not individualized tax or legal advice. Always consult a qualified professional for your specific situation.