According to government news outlets, the government of United Arab Emirates has exempted the value-added tax (VAT) on gold, diamonds and precious metals.
On Tuesday, the Emirates News Agency (WAM) reported that the UAE government is working on the changes of introducing a ‚ÄúVAT reverse-charge‚ÄĚ mechanism. That process involves the transfer of tax obligation from an overseas supplier to the recipient in Dubai. The recipient makes both the purchase and sale declaration, meaning that the two entries ‚Äúcancel‚ÄĚ offset each other, resulting in no tax payment in business in Dubai. On the same Tuesday, the Dubai Media Office twitted that the Cabinet approved the law to exempt value-added tax on gold and diamonds from importers and investors.
Although VAT was recently introduced, the government has decided to exempt VAT on diamonds and gold to the ease business in Dubai transactions in the nation. This is after a decline of 40 percent in business in Dubai was realized since the implementation of VAT in January.