Jewellery Repair Tax in the UAE: VAT, Making Charges and the Reverse Charge

The jewellery repair tax UAE picture has two faces. Face one is retail: a customer brings in a ring for resizing, a necklace for a clasp, a bracelet that needs three grams of gold added — the workshop charges 5% VAT on the whole invoice, making charges and gold included, exactly like any other repair service. Face two is trade: workshops doing work for VAT-registered jewellers, and jewellers supplying gold to workshops, operate inside the precious-goods reverse charge created by Cabinet Decision No. 127 of 2024 (effective 26 February 2025). Where both parties are registered, the buyer intends resale or production, and a written declaration is given before the supply, the supplier charges no VAT and the buyer self-accounts for 5%. The fault line between the faces is the making charge: practitioner summaries of FTA clarification VATP043 say a single composite price can take the reverse charge in full, while separately invoiced making services stay standard-rated at 5% — a position to confirm against the published clarification, not to assume. Corporate tax follows the standard 0%/9% structure with Small Business Relief to AED 3 million through 31 December 2029.

Since 26 February 2025, the VAT reverse charge for precious goods has covered far more than the old gold-and-diamonds rule it replaced (Cabinet Decision No. 25 of 2018). In scope: precious metals (gold, silver, palladium, platinum), precious stones (natural and manufactured diamonds, pearls, rubies, sapphires, emeralds), and jewellery made from them where the value of the precious component exceeds the value of the other components.

The four conditions

All must be met: both supplier and buyer are VAT-registered in the UAE; the buyer intends to resell the goods or use them in production or manufacture; the buyer gives the supplier a written declaration to that effect before the date of supply; and the supplier verifies the buyer's registration and retains the declaration. Miss one condition and the supplier is back to charging 5%.

What stays outside

Retail sales to private customers stay at 5%. Supplies to non-registered buyers stay at 5%. Zero-rated exports stay zero-rated, and investment-grade bullion of qualifying purity stays zero-rated — the reverse charge does not touch it. The regime is not retrospective: supplies with a date of supply before 26 February 2025 follow the old rules.

Why repair workshops care

A workshop is not only a service provider — it buys gold, holds gold stock, and supplies finished pieces back to jewellers. Every gram that moves between registered businesses is a potential reverse-charge supply, and every missing declaration is a 5% reassessment risk.

The making charge — the labour of sizing, setting, polishing, assembling — is where jewellery repair VAT gets genuinely technical, and where this guide draws a bright line between what is verified and what must be confirmed.

The practitioner reading of VATP043

FTA clarification VATP043 (replacing VATP032) is summarised by practitioners as drawing this distinction: where a supplier charges a single price for goods plus making services and all reverse-charge conditions are met, the supply can be treated as a single composite supply with the reverse charge applying in full. Where the goods and the making charges are invoiced separately, they are multiple supplies — only the goods take the reverse charge, while the making service remains standard-rated at 5%.

What that means for a repair invoice

A workshop returning a repaired bracelet to a registered jeweller at a single price of AED 1,800.00 (AED 600.00 making + AED 1,200.00 of added gold): on the composite reading, the whole AED 1,800.00 goes through the reverse charge. The same job invoiced as two lines — gold AED 1,200.00, making AED 600.00 — puts AED 1,200.00 through the reverse charge and AED 600.00 plus AED 30.00 VAT as an ordinary service.

The caveat, stated plainly

We have not verified this distinction against the published text of VATP043 itself; it rests on practitioner summaries. Before structuring invoices around it — especially the composite single-price route, which removes VAT from the labour element — confirm the position against the FTA's published clarification or take advice. An FTA assessment that disagrees would reassess the VAT plus penalties.

Follow a gram of gold through a trade repair to see the mechanics in motion. A registered jeweller sends a bracelet to a registered workshop for repair and stone-setting, supplying 3 grams of gold for the work; the workshop returns the finished piece.

The gold leg

The jeweller's supply of 3 grams of gold (say AED 1,200.00 at the day's price) to the workshop is a supply of precious metal between registered persons for production use. With the written declaration in place before the supply, the reverse charge applies: the jeweller invoices AED 1,200.00 with no VAT, and the workshop self-accounts — AED 60.00 output VAT and AED 60.00 input VAT in the same return, net nil.

The return leg

The workshop's return of the finished bracelet is a supply of jewellery where the precious component dominates the value. Again with declarations and registration verified, the reverse charge applies to the goods element. The making service follows the invoicing treatment in the previous section.

The paperwork that makes it work

Each reverse-charge supply needs: the buyer's dated written declaration held before the supply date, evidence the buyer's TRN was verified, and an invoice that states the reverse charge applies rather than showing VAT. File declarations by counterparty and date — in a dispute, the declaration is the whole defence.

None of the reverse-charge machinery touches the walk-in customer. A private individual having a ring resized, a clasp replaced or a stone reset is not VAT-registered, so every condition for the reverse charge fails at the first hurdle — and the workshop charges 5% on the full amount.

A retail invoice

Resizing and rhodium plating: labour AED 600.00. Three grams of gold added at AED 400.00 a gram: AED 1,200.00. Subtotal AED 1,800.00, VAT at 5% AED 90.00, total AED 1,890.00. The gold element does not get special treatment on a retail invoice — it is part of the repair consideration.

Customer-supplied gold

If the customer supplies their own gold for the repair, the workshop charges VAT only on its making charge — there is no supply of gold by the workshop. Document whose gold it is on the job card; a reviewer will ask where the metal came from.

Deposits

A deposit taken when the piece is booked in is an advance payment with the tax point at payment. An estimate is not a supply. Late collection does not change the VAT: the supply was the repair, complete when the piece was ready, and the tax point was the invoice or payment date then. Storage charges for uncollected pieces are a separate supply of services at 5%. The same timing rules as any repair business apply — see how watch workshops handle invoicing for the parallel treatment.

The same physical job — a bracelet repair needing AED 600.00 of making labour and 3 grams of gold at AED 400.00 a gram (AED 1,200.00) — produces three different VAT outcomes depending on the customer and the invoice.

B2B, single composite price

The workshop invoices the registered jeweller AED 1,800.00 as one line, all reverse-charge conditions met. VAT charged by the workshop: AED 0.00. The jeweller self-accounts: output VAT 1,800.00 × 5% = AED 90.00, input VAT AED 90.00, net AED 0.00 in the same return. Cash changes hands for the metal and labour only.

B2B, separately invoiced

Gold line AED 1,200.00 through the reverse charge — jeweller self-accounts AED 60.00 output and AED 60.00 input, net nil. Making line AED 600.00 plus AED 30.00 VAT charged by the workshop and paid by the jeweller, who recovers the AED 30.00 as input VAT. Total VAT in the chain: AED 30.00 of real cash VAT on the service.

Retail customer

AED 1,800.00 plus AED 90.00 VAT = AED 1,890.00 paid by the customer, no recovery. The three-way comparison is why the invoicing decision belongs in the engagement letter, not in the accounts department after the fact.

Check the arithmetic

In every scenario the VAT fractions must close: B2B single-price gives 1,800.00 × 5% = 90.00 self-accounted; split invoicing gives 60.00 on the gold plus 30.00 charged on the service = 90.00 total; retail gives 90.00 charged to the customer. Three routes, one consistent AED 90.00 of VAT on AED 1,800.00 of value — when the numbers diverge, an invoice or a declaration is wrong.

Keep the gold price evidence

Gold prices move daily, so file the day-rate source with each job: the invoice price of the gold must be traceable to a published rate on the supply date.

A VAT-registered jewellery workshop recovers input VAT across three very different cost types, each with its own mechanics.

Gold purchases

Gold bought from a VAT-registered supplier under the reverse charge: the workshop self-accounts for 5% output VAT and claims the same 5% as input VAT in the same return — 50 grams at AED 400.00 a gram is AED 20,000.00 of gold with AED 1,000.00 of output and AED 1,000.00 of input, net nil. Gold bought at retail (from a non-registered seller or as a retail purchase) carries 5% charged by the seller, recovered as ordinary input VAT with the tax invoice.

Consumables and tools

Solders, polishing compounds, crucibles, gravers, torch gas — all standard-rated inputs, all recoverable with valid tax invoices. From 1 October 2026 the FTA's input-verification decision expects documented supplier checks, so keep supplier TRNs on file.

The bench and the building

Workbenches, microscopes, laser welders and the workshop fit-out are capital assets: input VAT recovered in full, cost capitalised and depreciated for corporate tax. Year-end gold stock — grain, findings, work in progress — is inventory at cost, not a current-year deduction.

Tax is only half the compliance picture for a business that handles gold. Dealers in precious metals and stones (DPMS) are designated non-financial businesses under the UAE's AML framework, supervised by the Ministry of Economy and Tourism, and must register on the goAML platform operated by the UAE Financial Intelligence Unit.

Who counts as a dealer

A workshop that buys and sells gold — even as part of repairs — needs to assess whether it meets the dealer definition; pure labour-only repairers who never take title to metal are in a different position, but the assessment must be documented, not assumed. Cash transactions with a customer at or above AED 55,000.00 trigger the full customer-due-diligence and reporting obligations, including the designated precious-metals report.

The programme

Registration is the start, not the end: appoint a compliance officer, run an enterprise-wide risk assessment, perform customer due diligence and beneficial-owner checks, assess source of funds and source of goods, screen against sanctions lists, file cash and suspicious-transaction reports, keep records for five years, and train staff. Suspicious transactions are reported whatever the amount — the AED 55,000.00 threshold is a minimum trigger, not a safe harbour.

Free zones are not exempt

A workshop in a free zone handling gold is in scope exactly like a mainland one. Our gold-trader goAML guide walks through the registration sequence in detail.

The corporate tax position is the standard business one, but gold stock makes the computation distinctive.

The computation

Revenue — repairs, making charges, gold recharges — less deductible costs: gold consumed, wages for goldsmiths, rent, depreciation on equipment. Taxable income is taxed at 0% to AED 375,000.00 and 9% above. A workshop with AED 2,400,000.00 of revenue, AED 1,900,000.00 of costs and AED 500,000.00 of taxable income pays 9% on AED 125,000.00 = AED 11,250.00. Revenue of AED 3,000,000.00 or below qualifies for Small Business Relief through 31 December 2029 — elected on the return, not automatic.

Gold stock at year-end

Gold on hand — grain, sheet, findings, customer pieces held for repair — needs careful valuation: own stock at cost, customer property excluded from the balance sheet entirely. Only gold consumed in jobs is a current-year cost.

Licensing and VAT registration

The trade licence must cover jewellery repair or goldsmith activity — mainland via the Department of Economy and Tourism or the free-zone equivalent. VAT registration is mandatory once taxable supplies exceed AED 375,000.00 in twelve months or are expected to in the next thirty days; repair charges, making charges and gold recharges all count. Voluntary registration from AED 187,500.00 suits workshops with heavy gold and equipment purchases.

This page carries more caveats than most, and they are the point. First, the composite-vs-multiple treatment of making charges rests on practitioner summaries of FTA clarification VATP043, not on the published text verified by us — confirm it before structuring invoices around the single-price route. Second, whether a labour-only repairer who never takes title to gold counts as a dealer in precious metals and stones for goAML purposes is a facts-and-circumstances assessment we cannot make for your business; document your analysis. Third, the zero-rating conditions for investment precious metals turn on purity and global-market tradability tests in the VAT legislation — verify the specific consignment against the law rather than assuming 24-carat always qualifies. Fourth, licence activity names and fees vary by emirate and are quoted at application. Worked numbers use an assumed gold price of AED 400.00 per gram and are arithmetic illustrations at 2026 rates, not advice. Fifth, e-invoicing phase-in dates differ by business — the July 2026 framework date is the start of the rollout, not necessarily your deadline. Confirm your own phase-in date rather than relying on the headline.