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May 15, 2026

This Public Clarification, VATP043, details the application of the domestic reverse charge mechanism on precious metals and stones, replacing VATP032. It explains the implementation of Cabinet Decision No. 127 of 2024, effective 26 February 2025, which expands the scope from gold and diamonds to include silver, palladium, platinum, pearls, rubies, sapphires, and emeralds ('Precious Goods'). The clarification outlines mandatory conditions for suppliers and recipients, such as the recipient's VAT registration and written declaration of intent to resell or manufacture. It also addresses the VAT treatment of single composite supplies versus multiple supplies.

VATP043

VAT Public Clarification

Application of the Reverse Charge Mechanism on Precious Metals and Precious Stones between Registrants in the State for the purposes of Value Added Tax

Please be informed that Public Clarification VATP043 replaces Public Clarification VATP032.

Please note the effective date of Cabinet Decision No. 127 of 2024 is 26 February 2025.

Issue

Cabinet Decision No. 127 of 2024 on the Application of the Reverse Charge Mechanism on Precious Metals and Precious Stones between Registrants in the State for the Purposes of Value Added Tax ('Cabinet Decision No. 127 of 2024') was issued to replace 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 of 2018').

Cabinet Decision No. 127 of 2024 expands the scope of Goods on which the domestic reverse charge applies to include, in addition to gold, diamonds and jewellery made thereof, other specified precious metals, precious stones and jewellery made thereof.

This Public Clarification explains the changes to the rules as implemented by Cabinet Decision No. 127 of 2024. The Cabinet Decision is effective from 26 February 2025.

Summary

The list of Goods within the scope of the domestic reverse charge has been expanded to include precious metals, precious stones and jewellery made thereof, provided that the value of such precious metals or precious stones is higher than the value of other components ('Precious Goods').

The specified precious metals are gold, silver, palladium and platinum.

The specified precious stones are diamonds (natural and manufactured/synthetic), pearls, rubies, sapphires and emeralds.

The following conditions must be satisfied for application of the domestic reverse charge on the supply of Precious Goods:

The Recipient of the Precious Goods ('Recipient') must be registered for VAT in the UAE.
The Recipient must intend to resell the Precious Goods or use them to produce or manufacture Precious Goods.
The Recipient must provide a written declaration before the date of supply confirming the following:
- the Recipient is registered for VAT in the UAE, and
- the Recipient intends to resell the Precious Goods or use them in the production or manufacturing of Precious Goods.
The supplier must, before the date of supply, receive and keep the declaration from the Recipient and verify that the Recipient is registered for VAT (via the FTA's approved means).