CAREERS
ASSOCIATED ENTITIES
10 January 2025
The Ministry of Finance has announced the issuance of Cabinet Decision No. (127) of 2024, expanding the application of the Reverse Charge Mechanism to include precious metals and stones for VAT-registered businesses in the UAE.
This decision repeals the earlier Cabinet Decision No. (25) of 2018, which applied only to supplies of gold and diamonds among registered dealers.
Under the new decision, suppliers in the precious metals and stones sector will no longer need to charge VAT on their business-to-business transactions or remit VAT to the Federal Tax Authority. Instead, buyers will account for the VAT on both the sale and purchase of goods in their VAT returns, provided that both parties are registered for VAT in the UAE.
This change is expected to deliver significant advantages to businesses by simplifying compliance and improving cash flow. It reflects the UAE government’s continued commitment to enhancing the competitiveness of the precious metals and stones trading sector.
Previously, the reverse charge mechanism was restricted to the supply of gold and diamonds between VAT-registered businesses. The new decision marks a pivotal step in broadening the scope of this mechanism, further supporting the growth and development of the wider precious metal sector in the UAE.
By making such enhancements to the UAE’s VAT regulations, the Ministry of Finance reaffirmed its dedication to fostering a robust regulatory framework that enables businesses to thrive while aligning with international best practices.