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UAE Waives VAT On Precious Metals Trading

by Lorys Charalambous, Tax-News.com, Cyprus

03 May 2018


The United Arab Emirates's Cabinet has announced that wholesale trading in gold and diamonds will be made exempt from value-added tax.

A statement released on the Cabinet's website added that the VAT reverse charge mechanism will be introduced for wholesale supplies of gold, diamond, and precious metals. A reverse charge switches the obligation to account for and remit VAT to the consumer, rather than the supplier.

Local media reported the change affects business-to-business trading, with VAT to be levied on the final supply to a consumer.

The Government's announcement said: "In line with the UAE Government's efforts to ensure an efficient implementation of the Value Added Tax, VAT, while employing best international standards and maintaining the competitiveness of the local precious metals sector, the UAE Cabinet adopted a law to introduce the VAT Reversed Charge mechanism for investors in gold, diamond, and precious metals. This step aims to maintain UAE's high ranking in the ease of doing business indicators, and allows investors in gold, diamond, and precious metals to conduct business with ease. The VAT Reversed mechanism will contribute to stabilizing the gold and diamond sector in the UAE as well as stimulating investment in this sector."

"The law includes investments in precious metals such as gold, silver and platinum, used in trade in accordance with internationally accepted standards with a purity of 99 percent or more. This comes in the light of the many initiatives offered by the UAE to investors. It also provides the optimal environment, infrastructure and legislations necessary for growth and supports UAE's position as a global hub for trade."

TAGS: United Arab Emirates | environment | VAT rates | VAT tax authority guidance | VAT special schemes | tax | investment | business | value added tax (VAT) | law | tax authority | legislation | standards | trade | Tax

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