Expanding the application of the “reverse charge” mechanism to include precious metals and gemstones

The Ministry of Finance announced the issuance of Cabinet Resolution No. 127 of 2024 regarding the application of the reverse charge mechanism on precious metals and gemstones among those registered in the country for the purposes of value-added tax. The new decision cancels the previous Cabinet Resolution No. 25 of 2018 regarding the mechanism for applying value-added tax on gold and diamonds among those registered in the country.

The Ministry explained that the scope of application of the reverse calculation mechanism has been expanded to include precious metals (gold, silver, palladium, and platinum), and precious stones (natural and manufactured diamonds, pearls, rubies, sapphires, and emeralds), in addition to jewelry made from any of the precious metals or gemstones in which the value of the metals is… Precious stones, or gemstones, are higher than the value of other components, provided that the conditions stipulated in Cabinet Resolution No. 127 of 2024 are met, which will contribute to achieving great benefits. For the precious metals and gemstones trade sector in the country, the supplier registered in the value-added tax will not be responsible for imposing and collecting the value-added tax on supplies of goods covered by the decision to customers registered in the value-added tax, if the conditions stipulated in the decision of the Council of Ministers are met, and it will be The customer registered for VAT is responsible for calculating the tax on his purchases of goods covered by the decision, and disclosing it in his tax return.

The Ministry stressed that the new decision is a pivotal step that reflects the government’s continued commitment to supporting the precious metals and gemstones trade sector in the country.