Accounting software for gold and jewellery traders in UAE under the reverse charge rules

Gold businesses need stock in weight as well as value, and sales split by treatment. HelloBooks gives traders this starting structure.

• Stock: bullion, finished jewellery, diamonds and precious stones
• Sales to retail customers, sales to registered dealers, investment gold sales
• Reverse charge VAT payable and recoverable
• Making and design charges income
• Gold price revaluation differences and FX on USD purchases

Cabinet Decision No. 127 of 2024 applies the reverse charge to supplies of precious metals (gold, silver, palladium and platinum), precious stones (natural and synthetic diamonds, pearls, rubies, sapphires and emeralds) and jewellery made from them where the precious content is worth more than the other components. It applies when a supplier sells to a registered recipient who intends to resell the goods or use them to produce or manufacture goods. The recipient then accounts for the VAT instead of the supplier. It replaced Cabinet Decision No. 25 of 2018 on gold and diamonds.

Before the supply, the recipient must give the supplier written declarations of its intended purpose and of its VAT registration; the supplier keeps them and verifies the registration. Without the declarations the reverse charge does not apply. Separately, government guidance lists investment gold, silver and platinum of over 99% purity that is tradable in global bullion markets as zero-rated, while jewellery sold to consumers is standard-rated at 5%. The FTA has also issued public clarifications on making charges; read the current one before setting your treatment.

When you sell to a dealer, the agent checks that a signed declaration is on file and drafts the invoice under the reverse charge, without VAT and with a note that the buyer accounts for the tax. If a declaration is missing, it stops and asks. Purchases from wholesalers are read with weight, purity and value, and added to stock. Retail sales are posted with 5% VAT.

Ask “which dealer customers have no declaration on file?” or “how many grams of 22-carat stock do we hold?” Your accountant reviews the reverse charge entries in the VAT 201 draft before filing.

Owners watch stock by weight and purity, sales split by treatment, dealer declarations on file and gross margin per gram. A trader selling 1.2 kg of 22-carat jewellery in a month needs both the AED value and the grams to reconcile stock.

Weight-based stock items, declaration templates and invoice wording for reverse charge sales can be set up for your business. Book at /book-a-demo or email hello@hellobooks.ai.