UAE VAT changes for gold and diamond traders: 2025–2026

Gold, diamond and jewellery traders have seen more VAT changes in the last two years than in the five before. This note brings them together in date order. For how the reverse charge works day to day, see our full guide to VAT for gold and jewellery traders.

26 February 2025 — the reverse charge was widened

New rules replaced the 2018 reverse charge that applied only to gold and diamonds. Since 26 February 2025, the domestic reverse charge between VAT-registered businesses covers:

• precious metals — gold, silver, palladium and platinum;
• precious stones — natural and synthetic diamonds, pearls, rubies, sapphires and emeralds;
• jewellery made of them, where the metal or stone is worth more than the other components.

It applies when the registered buyer will resell the goods or use them to make goods. The buyer must first give the supplier two written declarations, before the date of supply: one stating its purpose, one confirming it is VAT-registered. The supplier keeps them and verifies the buyer's registration. Without the declarations, the reverse charge does not apply. Exports stay zero-rated and are outside the mechanism.

Guidance the FTA published in May 2025 explains the details. Making charges follow the reverse charge only where they form a single composite supply with the gold or stones; charged as a genuinely separate service, they are generally subject to 5% VAT from the supplier. Since 1 October 2026, showing the making charge on a separate line does not by itself split the supply if, in substance, the gold and the making cannot be separated (see below).

1 January 2026 — know your supplier

Amendments to the VAT law in force from 1 January 2026 allow the FTA to deny input VAT where a supply chain is linked to tax evasion and the business knew, or should have known — and a business that did not verify its supplies can be treated as having known. Since 1 October 2026 the required checks are spelt out (see below).

14 April 2026 — new penalties

The revised penalty rules reshaped VAT penalties:

• voluntary disclosure of an error: 1% of the tax difference for each month from the original due date;
• late payment: 14% a year, charged monthly;
• failing to issue a tax invoice or tax credit note on time: AED 2,500 per case.

With large invoice values, an error that creates a net tax difference and is left uncorrected for a year now costs around 12% of that difference in disclosure penalties alone.

1 October 2026 — supplier checks and regulation amendments

• Supplier checks. The FTA has set out the checks a business must make before claiming input VAT: on each supplier (identity, licence, place of business and risk indicators, with a bank-account confirmation where purchases from that supplier exceed AED 375,000 in 12 months) and on each supply (price and margin, payment method, and the origin of the goods). You also need a written verification policy, with checks repeated every 12 months. Smaller purchases below AED 10,000 are generally outside the checks, unless total purchases from that supplier exceed AED 100,000.

Amendments to the VAT rules took effect on 1 October 2026. They do not change the precious-metals rules themselves, but two points matter to the trade:

• Composite supplies. The regulation now states that elements of a supply that cannot be separated form one composite supply, taxed according to its principal element — relevant whenever gold and making charges are billed together.
• Cash payments. A new rule will deny input VAT where consideration above a threshold is paid in cash. The threshold is to be set separately; we have not seen it issued as of the date of this article. Cash-heavy businesses should prepare now.

What has not changed

• Investment precious metals — gold, silver and platinum of 99% purity or more, in a form tradeable on global bullion markets — remain zero-rated.
• The new reverse charge on metal scrap (from 14 January 2026) is a separate regime for scrap metals and does not replace the precious-metals rules.

Next: e-invoicing

Business-to-business gold and jewellery sales fall within the national e-invoicing system — from 1 January 2027 for businesses with revenue of AED 50 million or more, and from 1 July 2027 for the rest. Reverse-charge statements and declaration records will need to flow correctly through your invoicing system.

A short checklist

1. A dated declaration on file for every registered buyer, received before the date of supply.
2. Invoices that show the reverse-charge statement where it applies, and 5% VAT where it does not.
3. A written supplier verification policy, and documented checks on suppliers and supplies.
4. Cash receipts and payments tracked by transaction.
5. A plan for e-invoicing.

Our accounting and VAT service for gold and jewellery traders covers these points, and we can review past returns where a voluntary disclosure may be needed. Unsure whether your invoices are right? Talk to us.