The UAE Reverses VAT on Diamonds and Gold

The UAE has removed 5% VAT for investors in gold, diamond, and precious metals at the wholesale level. This is a VAT-reversed charge mechanism, where entries of 5% Value Added Tax will be documented in both buyers and sellers’ books, but no fees will be paid.

This move is expected to stabilise the gold and diamond sector in the country, stimulate investments, and ease pressure on the traders within the country. It will take effect immediately.

Value Added Tax relief has only been applied on the wholesale level, which means that retailers will still impose 5% VAT on all jewellery transactions. This is still expected to benefit shoppers because in theory, jewelry retailers would be able to pass on the benefits of the Value Added Tax relief onto the prices that they have set.

Overall, this is to start a small but steady revival in consumer interests for purchases in the gold and diamond jewellery industry.