Metal bought as an investment is amongst the categories for mandatory zero-rated treatment in the Agreement.
Metal bought other than as an investment will always be standard rated. Art. 36 of the Regulations mirrors the dispositions in the Agreement to establish that the zero-rating provisions apply to the supply or import of “investment precious metal” in accordance with Art. 45[8) of the VAT Law.
Investment precious metal is gold, silver and platinum that meet the following standards:
- The metal is of a purity of 99 percent or more; and
- The metal is in a form tradeable in global bullion markets.
THE AUTHORITY has issued a Cabinet Decision on “The Mechanism of Applying VAT on Gold and Diamonds between Registrants in the State” No. 25 of 2018). There are special rules relating to gold or diamonds bought for resale or manufacture, a VAT-registered purchaser may make a written declaration taking over the responsibility for any VAT obligations from the supplier. There is then no need for the supplier to charge VAT or to include the sale in his VAT return.
The supplier must be satisfied that the recipient is VAT registered, checking that they have a valid registration number. If the supplier is aware or should have been aware, that the recipient was not registered for tax purposes at the date of supply. the supplier becomes jointly and severally liable for any VAT and penalties due in respect of the supply.
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