Choose your region
Other GCC Countries
In our previous article VAT on gold and diamonds in UAE, we have learnt about the applicability of reverse charge on supply of gold and diamonds among registered businesses. In this article, let us understand the conditions to be satisfied to be eligible for this scheme and the exceptional scenarios where this scheme is not applicable.
The conditions to be satisfied for applying the reverse charge scheme on supply of gold and diamonds are:
Note that the recipient should declare the above details in writing to the supplier. The template for the declaration form is available in the FTA site. In this link, under VAT, you can download the form 'Declaration by registered recipient of gold and diamonds'.
The scheme for reverse charge on supply of gold and diamonds will not apply in the following cases:
a. Subject to VAT @ 0% on forward charge
In case of the following supplies of gold and diamonds, VAT @ 0% will be applicable, which has to be reported by the supplier in the VAT return:
b. Subject to VAT @ 5% on forward charge
In case of the following supplies of gold and diamonds, VAT @ 5% will be applicable, which has to be collected and reported by the supplier in the VAT return:
Hence, while the scheme of reverse charge on supplies of gold and diamonds is available to all registered businesses, the above mentioned conditions need to be satisfied to be eligible for this scheme. Also, this scheme is not applicable in certain specific scenarios, wherein, VAT @ 0% or 5% will be applicable on forward charge. Businesses dealing in gold and diamonds need to ensure to note these exceptional scenarios.
THE MOST TRUSTED VAT SOLUTION IN MIDDLE EAST
When it comes to managing VAT compliance and multiple other business processes, more than 50,000 businesses in the Middle East trust Tally.ERP 9.