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May 15, 2026

This Public Clarification, which replaces VATP029, provides guidance on the VAT treatment of ‘Making Services’ for gold and diamond supplies. It clarifies the application of the reverse charge mechanism (RCM) under Cabinet Decision No. 25 of 2018. For the temporary period of 1 June 2018 to 31 December 2022, the RCM could be applied to making services directly connected with a supply of gold. From 1 January 2023, the RCM is restricted to the gold and diamond components. The guide clarifies how to determine if a supply constitutes a single composite supply or multiple supplies.

VATP032

VAT Public Clarification

Gold and Diamonds – Amendment to Tax Treatment of Making Service

Please be informed that Public Clarification VATP032 replaces Public Clarification VATP029.

Issue

Jewellers generally receive a consideration for the supply of gold and diamond jewellery to cover the price of the gold and diamond as well as the Making Service.

In some instances, taxable persons supplying gold or diamond jewellery reflect the gold or diamond price and the Making Charges separately on the tax invoice issued for the supply, and in other cases both are reflected as a single price without disclosing the separate prices of each component.

This Public Clarification replaces VATP029 published in June 2022, and provides guidance on the application of the VAT legislation with regards to the Making Charges received by jewellers in accordance with the amendment to Cabinet Decision No. 25 of 2018 on the Mechanism of Applying Value Added Tax on Gold and Diamonds between Registrants in the State ('Cabinet Decision No. 25').

Terms Used in This Public Clarification

For the purposes of this Public Clarification, the terms below shall have the meaning assigned against each:

"Gold": Gold and/or Diamonds.
"Making Service": The service of making / manufacturing Gold Items.
"Making Charge": The price charged by jewellers in return for Making Services.

Summary

Tax registrants supplying Gold are not required to impose VAT on the supply of Gold and products which mostly consist of Gold, if the conditions of Cabinet Decision No. 25 are met. In such instances, VAT in respect of the Gold is accounted for under a special reverse charge mechanism which requires the registered recipient to account for VAT on the supply instead of the supplier.

Based on a new decision by the Cabinet, the definition of goods in Cabinet Decision No. 25 has been amended to state that it may include Making Services directly in connection with the Gold, for the limited period between 1 June 2018 and 31 December 2022.

This temporary change in definition would allow for the application of the reverse charge mechanism on the Making Services that are directly in connection with the supply of Gold, where the conditions as stipulated in Cabinet Decision No. 25 of 2018 are met for that specific period only.