Dubai’s sparkling gold market is a global financial center. This guide explains UAE VAT (since 2018), zero-rating for investment gold, standard-rated supplies (jewelry), import/export rules, corporate tax basics, record-keeping and best practices for gold traders operating in Dubai.
1. Introduction to VAT & Taxation in the UAE
As part of a GCC-wide tax reform project, the UAE implemented Value Added Tax (VAT) in January 2018 at a standard rate of 5%. The system aims to diversify government revenue while remaining business-friendly.
What is the VAT rate in the UAE?
The standard VAT rate is 5%, applicable to most goods and services unless specified otherwise.
Do all businesses pay VAT?
Only businesses whose annual taxable supplies and imports exceed AED 375,000 must register for VAT. Voluntary registration is available for businesses with taxable supplies above AED 187,500.
2. Overview of Gold Trading in Dubai
Dubai’s gold market includes retail jewelry, bullion, coins, and digital-gold platforms. Tax policy balances trade facilitation with compliance requirements.
Are all types of gold taxable?
No. Investment gold that meets specific purity and tradability criteria can be zero-rated, while retail jewelry is subject to the 5% VAT.
Can foreigners trade gold in the UAE?
Yes. Residents and foreign entities can trade gold after obtaining appropriate licenses (e.g., DMCC or Dubai Economy & Tourism registrations).
3. VAT Applicability on Gold
The Federal Tax Authority (FTA) distinguishes between investment-grade gold and non-investment gold for VAT purposes.
Investment Gold (Zero-Rated)
Gold is treated as investment-grade if it meets conditions such as minimum purity (typically 99%+) and tradability on global bullion markets. Examples include qualifying gold bars, bullion and certain coins.
See Also Start Gold Trading Business in Dubai, UAE: A Complete Guide to Licensing, Setup, and Compliance
Non-Investment Gold (Standard-Rated)
Jewelry and gold items for personal use are standard-rated and attract 5% VAT.
Common questions
- Is investment gold VAT-free? — Yes. Investment gold is zero-rated (0%), but input VAT can still be recovered by registered suppliers.
- Do gold coins incur VAT? — Coins that meet purity and market tradability standards are treated as investment gold and are zero-rated.
- Are jewelry sales taxable? — Yes, jewelry is subject to the standard 5% VAT.
4. Zero-Rated vs Standard-Rated Gold
| Gold Type | VAT Rate | Treatment |
|---|---|---|
| Investment-grade bullion | 0% | Zero-rated |
| Retail gold jewelry | 5% | Standard-rated |
| Scrap gold resale | 5% | Standard-rated |
| Gold imported for refining | 0% or 5% | Depends on importer’s VAT registration & purpose |
| Exported gold | 0% | Zero-rated (with documentation) |
Which products are zero-rated?
Investment-grade gold sold between VAT-registered dealers and qualifying investment gold products are zero-rated.
When is VAT charged at 5%?
VAT at 5% applies on sales to end consumers, retail jewelry, and non-investment-grade items.
5. VAT Registration Requirements
Businesses must register for VAT if annual taxable supplies or imports exceed AED 375,000. Voluntary registration is possible above AED 187,500.
How do I register a gold business for VAT?
Register online via the Federal Tax Authority (FTA) portal.
Are free zone companies exempt?
Not generally. Some free zones (e.g., DMCC, Gold & Diamond Park) have arrangements that affect intra-dealer zero-rated supplies — classification and documentation remain critical.
6. Calculating VAT on Gold Transactions
VAT is calculated on the value of supply, which includes the sale price plus any additional charges (e.g., making charges).
Retail jewelry sold for AED 10,000 + Making charges AED 500 → VAT = 5% of (10,000 + 500) = AED 525
Is VAT charged on exported gold?
No — exports outside the GCC are zero-rated if proper export documentation and customs evidence are retained.
Are online gold sales subject to VAT?
Yes, if the buyer is located within the UAE. Sales to overseas customers (with proof of export) are zero-rated.
See Also The Ultimate Guide to Starting a Gold Trading Business in Dubai
7. VAT on Imports & Exports of Gold
Imports
Imports may attract a reverse charge where the VAT-registered importer self-accounts for VAT instead of paying at customs. Investment-grade gold imported by registered dealers can be zero-rated under qualifying conditions.
Exports
Exports outside the GCC are zero-rated provided traders maintain proof of export (customs declarations, airway bills, invoices, etc.).
Key documents for VAT-free exports
- Commercial invoice
- Customs declaration
- Proof of export (airway bill, shipping documents, delivery receipts)
8. Record-Keeping & Compliance
Gold traders must keep accurate VAT and accounting records. Required records include invoices (with VAT numbers), import/export documentation, VAT returns and input/output VAT calculations.
How long to retain records?
Keep records for the period required by the FTA (commonly at least 5 years) and for any statutory audit purposes.
9. Penalties for Non-Compliance
Non-compliance attracts penalties; typical examples include:
| Violation | Penalty (AED) |
|---|---|
| Failure to register for VAT | 10,000 |
| Late VAT filing | 1,000 (first time), 2,000 (repeat) |
| Incorrect VAT return | 3,000 |
| Failure to maintain records | 10,000–50,000 |
| Non-payment of VAT due | 2% monthly on unpaid amount |
10. Taxation Beyond VAT: Corporate Tax & Free Zones
From June 2023, the UAE introduced a Federal corporate tax of 9% on business profits above AED 375,000. Qualifying free zone entities may benefit from preferential (often 0%) rates if they meet specified substance and qualifying income rules.
See Also How Profitable Is the Gold Trading Business in Dubai?
11. Best Practices for VAT Compliance
- File VAT returns on time.
- Keep accurate invoices and import/export evidence.
- Verify supplier and buyer VAT registration numbers.
- Classify gold correctly (investment vs. non-investment).
- Use professional advisors for complex transactions.
Are accounting software tools recommended?
Yes — UAE-compliant systems (Tally, Zoho Books, QuickBooks, Odoo) help automate VAT tracking and FTA e-filing formats.
12. Digital Tools & Technology for VAT Management
Modern gold businesses should adopt digital accounting and ERP tools that support VAT automation, e-invoicing and FTA-compliant reporting to reduce errors and speed up reconciliation.
Which software is commonly used?
Tally ERP 9, Zoho Books, QuickBooks, and Odoo are widely used by UAE traders for VAT automation and reporting.
13. Conclusion: Key Takeaways on VAT & Taxation
- UAE VAT rate is 5%, with zero-rating for qualifying investment-grade gold.
- Classification between investment and jewelry gold determines VAT treatment and recovery of input VAT.
- Exports and some free zone transactions often enjoy tax reliefs when properly documented.
- Good record-keeping, timely filing and professional advice reduce compliance risk.
- Despite VAT and corporate tax, Dubai remains a competitive hub for gold trading.
Q&A Section: Quick Answers for Gold Traders
- 1. Is gold trading taxable in Dubai?
- Yes — most gold transactions are taxable. Investment-grade gold that qualifies is zero-rated.
- 2. What is the VAT rate on jewelry?
- Retail and non-investment gold products are subject to 5% VAT.
- 3. Can gold traders recover input VAT?
- Yes — VAT-registered businesses can generally claim input VAT on purchases related to taxable supplies.
- 4. How long should I keep VAT records?
- Retain records for at least five years from the transaction date (or as required by FTA rules).
- 5. Are exports of gold VAT-free?
- Yes — exports outside the GCC are zero-rated when correctly documented.
- 6. Do I pay VAT when importing gold?
- VAT-registered importers typically account for VAT via reverse charge — check specific customs & FTA guidance.
- 7. What if I miss filing VAT returns?
- Penalties apply — amounts depend on the nature and frequency of the breach (e.g., AED 1,000+ for late filing).
- 8. Are free zone companies exempt from VAT?
- No — free zone entities must follow VAT rules; some transactions between registered dealers may be zero-rated with correct documentation.
- 9. Is the gold business subject to corporate tax?
- Yes — federal corporate tax of 9% applies on profits above AED 375,000, though qualifying free zone income may be treated differently.
- 10. Does Dubai remain tax-friendly for gold trading?
- Yes — low VAT and corporate tax rates, combined with targeted exemptions and trade infrastructure, keep Dubai attractive for gold trading.