UAE Expands Reverse Charge to Precious Metals & Stones

The UAE Federal Tax Authority (FTA) has issued a new clarification VATP043, replacing VATP032: expanding the Reverse Charge Mechanism (RCM) to a wider category of high-value items traded between VAT-registered businesses.

Effective from 15 February 2025, the following are now included under the RCM:

• Precious metals – gold, silver, palladium, platinum
• Precious stones – diamonds (natural and synthetic), pearls, rubies, sapphires, emeralds
• Jewelry where the value of the precious materials exceeds other components

What changes for businesses?

• Suppliers will no longer charge VAT on these transactions.
• Buyers (if VAT-registered) must self-account for VAT.
• A written declaration is mandatory from the buyer confirming:
• Suppliers will no longer charge VAT on these transactions.
• Buyers (if VAT-registered) must self-account for VAT.

If these conditions aren’t met, RCM won’t apply, and the VAT burden stays with the supplier, affecting compliance and input tax claims.

Key Actions:

• Revisit supply agreements
• Ensure teams understand declaration requirements
• Verify TRNs and invoice formats are compliant

This change brings significant implications for businesses dealing in precious materials. Review your processes to stay aligned with the updated FTA guidance.