The VAT (value-added tax) on gold jewellery will likely apply to the entire piece, which effectively means an additional payout of Dh7-Dh8 a gram at today’s prices, according to industry sources. But on gold bars, deemed as investible assets, no such tax will apply. (There will also be no duty on loose diamonds.)
The decision to include gold jewellery under VAT will be spelt out in the Executive Regulation governing the application of value-added tax in the UAE. A draft version of the document was released yesterday. The Regulation defines VAT as the 5 per cent tax imposed on the import and supply of goods and services at each stage of production and distribution, including that is a “deemed supply”. The only exceptions are specific supplies subject to the zero rate and those exempt as specified in the Decree Law.
So, what would the VAT be on a typical jewellery piece? Wednesday’s price was at Dh145.50 a gram for 22K.
It has been a tough year for gold and jewellery sales in the UAE. The general sentiments over the economy rubbed off on resident’s gold buying habits as well. But market sources say that Q3-17 sales were helped by decent sized demand associated with the Indian festival of “Diwali” last month.
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