Abu Dhabi: On Friday, December 10, 2025, the Ministry of Finance (MoF) of the United Arab Emirates announced its newly updated VAT laws concerning the fresh tax structure on trading precious metals, stones, and jewels. The new law applies to businesses dealing with valuable metals and jewellery.
The new decree is expected to cover the prices for expensive metals and stones and expand the scope of the “reverse charge mechanism”. Hence, trades dealing with related products are required to be acquiescent to the fresh VAT directions.
As per the issuance of the 2024 Cabinet Decision Number (127), the MoF declared its decision to develop the application of its reverse charge mechanism. The new VAT regulation repeals the Cabinet Decision No. (25) taken earlier in the year 2018 on the VAT tax application for gold and diamonds among all registered dealers.
Based on these new provisions, the VAT-registered trades that supply precious metals and jewellery items are no longer required to collect or charge VAT from VAT-registered customers.
The responsibility of assembling or charging Value Added Tax will move to the purchaser who needs to compute, declare, and account for the amount of tax in their tax return documents.
These updated VAT rules apply to Gold, silver, platinum and even palladium (precious metals), sapphires, rubies, pearls, emeralds, and Diamonds (both natural and lab-created or manufactured) (precious stones) and finally, the new law applies to jewellery made with the above-mentioned precious metals or stones
This law applies when the rate of the precious stones or metals surpasses the overall value of the other products or components.
The key objective behind the newest changes in UAE VAT laws and the implementation of the reverse charge mechanism is to boost the trading of precious metals and stones. This can be accomplished by streamlining the VAT compliance process for all related businesses.
The UAE Ministry of Finance has also revealed that the latest decision is reflective of the government’s desire and commitment to facilitate the advancement and growth of this industrial sector while also aligning with the best practices around the globe.jewellery
What is the reverse charge mechanism in VAT?
The “reverse charge mechanism” is a VAT concept introduced by the government. According to the new system, the buyer is accountable for paying VAT to the administration. The entire task of reporting and paying taxes lies with the buyer and the seller does not play any part in this.
While the seller does not need to charge VAT during the sale, he must make sure that the buyer is acquiescent to all the terms and conditions linked with this mechanism.
How is it going to help the UAE?
One of the significant aspects of the reverse charge mechanism is that it reduces the administrative burden. Moreover, it paves the way for a better regulatory framework for the taxation process. It also helps businesses to grow and prosper in the UAE.
The latest changes can benefit businesses dealing with precious metals and stones. By simplifying the VAT process and allowing businesses to navigate these regulations easily, the new VAT laws can assist them in focusing on essential tasks and operations.
The update also highlights the UAE’s stance on improving its regulatory framework and boosting competitiveness. According to UAE’s Ministry of Finance, this decision can also support a fast-growing and thriving trading sector.
The expansion is going to take place as per the conditions stated in Cabinet Decision No. (127) of 2024. It can improve the functioning of UAE’s precious stones and metals industry.
The Ministry has also emphasized that this new tax regulation is a valuable step in the right direction to boost the efficiency of the precious stones and jewellery trading sector.
These enhancements to the country’s VAT regulations can further help create a better and more agile regulatory framework that helps in tax collection and ensures business growth. Not only can it help businesses thrive, but adhere to the best practices around the globe.