“Reverse Charge Mechanism” now include VAT on Precious Metals such as gold, silver, platinum, pearl and more.
The Ministry of Finance has recently announced the implementation of Reverse Charge Mechanism for VAT on Precious Metals such as Gold, Silver, Platinum for VAT registered businesses in UAE.
Based on reverse charge mechanism, the supplier will not have to charge and collect VAT on the items that are covered by this cabinet decision. The buyers will be having to calculated and declare VAT on their purchases and report it in their VAT return. The buys will pay tax directly to the government.
The ministry further clarified that reverse charge mechanism covers precious metals (gold, silver, palladium and platinum) and precious stones (natural and manufactured diamond, pearls, sapphires, emeralds and rubies). In addition to that any jewelry made from any of these metals or stones (subject to the value of metals or stones exceeds the value of other components) also falls under reverse charge mechanism.
This expansion, under the conditions outlined in Cabinet Decision No. (127) of 2024, aims to bring significant benefits to the precious metals and precious stones trading sector in the country, the MoF said.
This is a step in the right direction, it added, reflecting the government’s ongoing commitment to supporting the precious metals and gemstones trading sector in the country.
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