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VAT on Gold in UAE: Rates, Exemptions & Rules [2025 Update]

Updated on: May 28th, 2025

9 min read

In 2023, the UAE exported around $47B worth of Gold, making it the second-largest exporter of Gold in the world. If you are also considering trading in Gold in the UAE, especially from the Dubai free zone, it is important to know how VAT is charged on gold and rate of VAT applied on it. Since 2018, a 5% VAT has applied to most goods, including gold; however, 99% pure gold of investment grade is zero rated and charged at 0%.

Gold belongs to the precious metals category of goods, so its VAT treatment is slightly different from that of other goods. In 2024, the UAE government announced the introduction of a reverse charge mechanism on the purchase of gemstones and special metals, including Gold. In this guide, we’ll explain how VAT on gold works and how you can buy VAT-free gold in the UAE.

What is VAT in the UAE?

Value-Added Tax or VAT is a type of indirect tax charged on most goods and services sold or consumed in the UAE. The standard VAT rate in the UAE is 5%.

Under this system, this 5% tax is collected at every stage of the supply chain, from manufacturers to wholesalers, to retailers, until the final product reaches the consumer. So, the businesses at each stage collect their share of VAT and pay it to the government. They can also claim back the VAT they paid on purchases, so they only pay the difference between what they collect and what they’ve already paid, known as the “Net VAT.” This system helps the government generate revenue while keeping the tax burden fair.

VAT in the UAE is governed by the Federal Decree-Law No. 8 of 2017 and is monitored by the Federal Tax Authority (FTA).

VAT on Gold in the UAE

Gold trading in the UAE is subject to the standard VAT rate of 5%. However, certain types of gold, specifically investment-grade gold (with 99% purity or higher), may qualify for zero-rated treatment or exemptions under specific conditions. Registered businesses can also recover VAT paid on gold purchases, provided the gold is used for taxable business activities and proper documentation is maintained.

For business-to-business (B2B) transactions involving gold, the UAE has implemented a reverse charge mechanism. If the buyer and seller are VAT-registered in the UAE, the seller does not collect VAT at the point of sale. Instead, the buyer reports and pays the VAT directly in their VAT return. This approach improves cash flow and reduces upfront tax payments, which is especially helpful for businesses with high-value trades.

For individual (non-registered) buyers, VAT is included in the price and collected by the seller.

Exemptions from VAT on Gold in the UAE

Here's when gold qualifies for exemptions:

Gold must be investment grade, meaning it must be at least 99% pure.
Only bars, ingots, and coins that are tradable in global bullion markets are allowed.
Gold jewellery does not qualify for zero-rating.
The transaction must occur between two VAT-registered businesses in the UAE.
Retail sales to end consumers do not qualify.
The gold must be acquired for resale or investment, not for manufacturing jewellery or personal use.

Documents and Compliance Requirements for Exemption from VAT on Gold

If you want to claim a VAT exemption on gold in the UAE, you must have the right documents in place. They are:

What You Need	Why It’s Needed
Tax Invoice	Shows full details of the transaction, including TRN, gold value, making charges, and VAT notes.
Purity Certificate	Confirms that the gold is 99% pure or more, which is required for VAT exemption.
TRN of Buyer & Seller	It proves both are VAT-registered, necessary for B2B exemptions and reverse charge use.
Sales Contract	Details the type of gold, any charges, and how VAT is handled.
Import Documents	Needed if the gold is brought into the UAE, shows value and any duties paid.
Export Documents	Proves the gold left the UAE, which helps qualify for zero-rating.
Bank Statement or Receipt	Confirms payment was made and matches the invoice, which helps during audits.

Impact of VAT on the Gold Market in the UAE

When the UAE implemented VAT at 5% in January 2018, the gold sector experienced a noticeable slowdown. The retail segment especially saw a huge consumer hesitation, which led to reduced footfall and cautious spending. However, over the years, this move has helped the UAE government shift its dependence on oil revenue to other sectors of the UAE economy. It has allowed them to adjust major reliefs like VAT exemptions for investment-grade gold. Such moves have aligned the UAE policies with international gold-trading hubs like Singapore and Switzerland to preserve Dubai’s position as a global centre for gold trading by preventing tax-induced capital flight to other markets.

Conclusion

Today, the UAE continues to thrive as a global hub for gold, and it remains one of the biggest business attractions in the UAE. To survive and make the most of your purchases of gold, it is important to be vigilant of all the compliance requirements. As the rules evolve, especially with new mandates like e-invoicing on the horizon, it pays to stay informed and aligned with best practices.

Frequently Asked Questions

What is the standard VAT rate in the UAE as of 2025?

The standard VAT rate in the UAE remains at 5%, applicable to most goods and services, including gold products.

What type of gold is subject to the standard 5% VAT?

Gold products that do not meet the criteria for investment-grade status are subject to the standard 5% VAT. This includes:

Gold jewelry intended for personal use.
Gold items with a purity less than 99%.
Gold products sold to non-VAT registered individuals or businesses.

Under what conditions is gold exempt from VAT in the UAE?

The conditions that need to be fulfilled to apply for VAT exemption on gold are:

Gold must be investment grade, meaning it must be at least 99% pure.
Only bars, ingots, and coins that are tradable in global bullion markets are allowed.
Gold jewellery does not qualify for zero-rating.
The transaction must occur between two VAT-registered businesses in the UAE.
Retail sales to end consumers do not qualify.
The gold must be acquired for resale or investment, not for manufacturing jewellery or personal use.

Can tourists claim a refund on VAT paid for gold purchases in the UAE?

Yes, eligible tourists can claim a refund on VAT paid for gold purchases in the UAE. To qualify:

The purchase must be made from a retailer registered under the Tax Refund for Tourists Scheme.
The tourist must validate the purchase at the point of exit from the UAE.
The goods must be exported within 90 days from the date of purchase.

How does the reverse charge mechanism apply to gold transactions between VAT-registered businesses?

Both parties must be VAT-registered in the UAE and must conduct a B2B transaction. If this is true, then, the reverse charge mechanism allows the buyer to account for the VAT instead of the seller.