The UAE Cabinet has introduced a tax mechanism that will exempt investors of gold, diamond and other precious metals from Value Added Tax (VAT).
With the new system, the five percent VAT in gold and diamond, among others, will only be documented in the seller’s records. The VAT, however, will not be paid by the investor, reported WAM.
The new law is applicable for different precious metals including gold, silver, and platinum with a purity of 99 percent or more used in trade in accordance with internationally accepted standards.
The move is in line with the UAE Government’s efforts to ensure an efficient implementation of the VAT while still employing best international standards and maintaining the competitiveness of the local precious metals sector.
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 stabilising the gold and diamond sector in the UAE as well as stimulating investment in this sector.
This comes in light of the numerous 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.
The volume of gold trade in the UAE rose to AED244.3 billion in 2016, with a growth rate of 13 percent. The value of UAE’s imports of gold amounted to AED142.4 billion in the same year, while exports amounted to AED75.9 billion, and re-export amounted to AED26 billion.
The gold, diamond and precious metals sector is one of the vital national economic sectors and one of the most important for the economic diversification that is expected to witness significant growth in the coming period as part of the UAE’s objectives.
Source: WAM
