VAT in Dubai on Gold: Everything You Need to Know 2025

Buying gold in Dubai isn’t as simple as walking into a store, buying a gold item, and walking out. Well, it’s actually that simple, but you need to keep VAT in mind to avoid going over budget.

You don’t know the details of VAT in Dubai on gold? Well, that’s what we cover in this post. So, let’s get right to it.

What Is VAT in Dubai on Gold?

VAT in Dubai on Gold is part of the Value-Added Tax (VAT) system, which is a consumption tax that the UAE government introduced in 2018. The purpose of this tax was to diversify the government’s income streams instead of depending heavily on oil-/gas-related sources, making VAT services in the UAE essential for businesses to stay compliant

As you can probably tell, the tax applies to various goods and services, including gold. How much is it? The standard rate is 5%. So, if you’re buying a AED 10,000 gold necklace, you’ll pay an extra 5%, making the total price AED 10,500.

Here’s the thing, though: Dubai has a competitive global market when it comes to gold. As a result, they have special VAT regulations to maintain that competitiveness:

• Consumer gold jewelry: The standard gold rate in Dubai is 5%. That includes jewelry, ornaments, and any gold items that don’t meet the “investment gold” criteria.
• Investment-grade gold: Yes, certain types of gold, those with a 99% purity rate or higher, are zero-rated. That means VAT doesn’t apply to these variants. Of course, it’s not that simple, as they need to meet certain standards to be exempt, but more on that later.

What’s the point of these special rules? Well, the UAE wants to keep the gold trade active. And while other countries exempt gold from VAT, the UAE decided to strike a unique balance.

Benefits of VAT Exemption on Gold VAT in UAE

At first glance, you might be confused: Why introduce a tax on gold if you’ll only exempt specific types? That’s a good question, but there are plenty of advantages to applying VAT exemptions on gold.

Improving Market Competitiveness

By exempting qualifying gold products from VAT, the UAE makes trading and investing in gold easier. Therefore, it becomes more attractive. When investors and traders want to buy high-purity gold products, they’ll immediately think of the UAE due to its zero-rated policy.

Why go to India with its 3% VAT on investment-grade gold when you can buy it with 0% VAT from the UAE?

Supporting Economic Growth

The zero-tax policy doesn’t just help gold businesses. It also helps boost the economic growth of the UAE. How? Well, exempting investment-grade gold from VAT establishes the UAE as the go-to stop for gold investment and trading.

As that industry prospers, it’ll invite foreign traders, investors, and tourists. Over time, that’ll help boost economic growth, as it’ll pave the way for more jobs, not just in the gold industry, but in transportation, security, insurance, and more.

Steps to Claim VAT Refund When Buying Gold in Dubai

If you’re a tourist in Dubai and are looking to buy a few gold jewelry pieces for your friends and family members, you’re in luck. The country has the Tax Refund for Tourists Scheme, which allows you to reclaim most of the VAT in Dubai on Gold you paid on your purchase.

Shop at Eligible Shops

Yes, not all shops will give a tourist VAT refund in Dubai. If you want your money back, you need to shop at retailers that are part of the official tourist refund program. How can you identify them?

Luckily, most of the shops in the Dubai Gold Souk offer a VAT refund. However, you can always ask the sellers before buying anything.

Get a VAT Refund Form

After you buy your gold, ask the retailer for a VAT refund form. They’ll issue one for you along with the receipt. Keep in mind that this form is necessary when you request a refund. So, make sure the form includes all the necessary information before submitting it.

Visit a VAT Refund Counter

Before you leave Dubai, go to the VAT refund counter at the airport and show the employees your refund form, passport, and gold item. They’ll scan them all and offer you a refund.

You can choose to receive the refund in cash or have it transferred to your credit card. Keep in mind that you won’t get 100% of the VAT back. You’re looking at 85% of what you paid.

VAT Registration for Gold Traders in Dubai

If you own a gold-trading business, you must register for VAT if your business meets a certain standard. That’s surpassing an annual taxable turnover of AED 375,000. However, since gold-trading businesses can easily cross this threshold, you’ll see that most of them are already registered.

Obviously, failing to register will result in different types of fines, depending on the situation. So, it’s best to avoid the hassle and register on time.

If you haven’t crossed that threshold, but your annual taxable turnover is between AED 187,500 and 375,000, you can voluntarily register for VAT. That will help you reclaim any VAT you pay on purchases.

Impact on Gold VAT Rate in Dubai and Across the UAE

Now that you understand the nuances of VAT on gold bar in UAE, let’s see how this tax impacted the gold industry. Obviously, people were on edge when the UAE government first introduced VAT.

As gold jewelry became more expensive, shoppers leaned towards simpler designs to make it more affordable for consumers. However, when the UAE government zero-rated investment-grade gold, investors and traders became more at ease.

Today, the gold industry is still as active as ever, and the local authorities are still trying to ensure VAT doesn’t hold the industry back.

Read More: Vat on rental income in the UAE

Common Mistakes to Avoid When Buying or Selling Gold in Dubai

Whether you’re a tourist buying gold for your friends or a business owner trading in it, here are a few VAT-related mistakes that you want to avoid.

Skipping Documentation

If you’re a gold-trading business owner, documentation is everything. Why? Because if you want to register for VAT exemption, you need to present a lot of paperwork, including tax invoices, proof of purity for gold, and the buyer’s/seller’s Tax Registration Number.

You can see how securing all these documents isn’t a simple task. It requires meticulous documentation. One small mistake might cost you that exemption.

Assuming All Gold is VAT-Free

Yes, believe it or not, some people think all gold in Dubai is tax-free. As we previously mentioned, though, only investment-grade is zero-rated. Even a 24K pure gold coin will be taxed if it’s sold through an over-the-counter sale to a consumer.

Get Professional Support for Gold VAT Registration in Dubai with Alsun

At this point, you’re probably confused. Yes, we know VAT regulations are a bit complex. That’s why we always recommend using professional help. It’ll give you the peace of mind you’re looking for.

Here’s the thing, though: Not all service providers on the market are the right fit for you. So, you need to choose carefully. At Alsun Bookkeeping and Taxation, we combine expertise, certification, and affordability. In other words, we provide a more seamless customer experience than any of our competitors.

Conclusion

Ultimately, VAT in Dubai on Gold is similar to other goods and services. Yes, it applies to the standard 5% tax, but there are a few exemptions. So, if you want to seamlessly go through this complex process, Alsun Bookkeeping and Taxation is your best bet. Give us a call, and we’ll handle the entire VAT process for you.

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