UAE Expands Reverse Charge Mechanism: Boosting the Precious Metals & Stones Industry
The UAE Ministry of Finance has introduced Cabinet Decision No. (127) of 2024, significantly expanding the Reverse Charge Mechanism (RCM) to include precious metals and stones. This new policy replaces Cabinet Decision No. (25) of 2018, which previously applied only to gold and diamonds.
Key Changes:
- Expanded Scope: The RCM now covers precious metals and stones in addition to gold and diamonds.
- VAT Process Simplified: VAT-registered suppliers of these items are no longer required to charge VAT on B2B transactions.
- Buyers’ Responsibility: Instead, buyers will account for VAT in their own VAT returns, provided both parties are VAT-registered in the UAE.
Why is this Important?
- This expansion will streamline VAT compliance, enhancing cash flow for businesses involved in the precious metals and stones sector.
- It positions the UAE as an increasingly competitive hub for these industries, aligning with international standards and supporting sector growth.
What This Means for Businesses:
- Businesses in the precious metals and stones sector can expect easier VAT management.
- Improved liquidity as VAT is accounted for by buyers, not suppliers.
- Increased sectoral growth driven by a more favorable business environment.
For businesses involved in the precious metals and stones sector, this is a significant step forward in creating a more efficient and internationally competitive ecosystem.
