A standard 5% VAT applies to most gold items. An important distinction exists between jewelry and investment gold. Gold jewelry always has a 5% VAT on the total price. High-purity investment gold often has special tax treatment. Therefore, knowing the difference helps you manage costs.
You must pay 5% VAT on gold jewelry purchases. The tax applies to the item's full value. Remember, this includes both the gold price and the making charges. Retailers are required to show the VAT amount clearly on your invoice. Here is a simple breakdown of a jewelry purchase.
Always ask for a detailed tax invoice. It is proof of the VAT you paid. You will need it for any potential tourist refunds.
The UAE government created special rules for investment gold. These rules support the wholesale gold market. They make the UAE a competitive place for gold trading.
Investment-grade gold meets specific criteria. It must be gold with 99% purity or higher. This rule is set by UAE Cabinet Decision No. 25 of 2018. Common forms include:
Items like 22-karat (91.6% purity) jewelry do not qualify.
The tax treatment for investment gold has two parts.
Tourists can claim a VAT refund on gold purchases. The refund is part of the UAE's Tourist Refund Scheme. You must follow a few simple steps to get your money back.
Note that an administration fee is deducted from the refund amount.
People and businesses often make preventable errors. Awareness helps you avoid these costly mistakes.
The UAE's VAT rules are designed with clear intent. They tax consumer spending on jewelry. They also protect the wholesale investment market. For a jewelry shopper, the most important detail is the final price. Always compare making charges between stores. For investors, the system ensures Dubai remains a global gold hub. Always keep your invoices. They are your official record for tax purposes and proof of ownership.
Yes, all gold jewelry has a 5% VAT. This includes 18k, 21k, and 22k gold items. Individuals and authorities calculate the tax on the total price, which includes making charges.
Yes, tourists can get a VAT refund on gold jewelry. You must shop at a registered tax-free store. You also need to validate your purchase at the airport before leaving the UAE.
The reverse charge applies to B2B sales of investment gold. The registered buyer accounts for the 5% VAT, not the seller. This mechanism helps traders manage their cash flow effectively.
Often, yes. Dubai has very competitive making charges. The overall price can be lower than in other countries. This is true even after adding the 5% VAT.
Individuals selling personal gold do not charge VAT. However, if you sell to a registered business, they may need to account for VAT on their purchase under specific rules.
Federal Tax Authority. (2018). Cabinet Decision No. (25) of 2018 on the Mechanism of Applying Value Added Tax on Gold and Diamonds between Registrants in the State.
Abrar Ahmad holds a Master’s as well as an MPhil in Finance and has an extensive experience of 10+ years in managing all aspects of Taxation, VAT Consulting and Accounting. He also carries with him a working knowledge of corporate tax and has helped drive value and growth to the businesses of numerous clients.