The Federal Tax Authority (FTA) has recently issued a public clarification – VATP029 – relating to B2B supplies of gold and products consisting mainly of gold (‘Gold Items’).
B2B supplies of gold items
Since 01/06/2018, the B2B supplies of gold items are subject to reverse charge mechanism (RCM).
VAT029 – Single vs Multiple Supplies
VATP029 states that a supply of Gold Items and making services could be categorised as:
* A single composite supply of a Gold Item; or
* Multiple supplies consisting of both goods (gold) and services (making charges) …..
Implications on jewellery
VATP029 states that RCM applies only to goods and not to services.
International Jurisprudence and VATP029
It is interesting to note that VATP029 seems to differentiate between a single composite supply and multiple supplies primarily on the fact whether a single price has been charged or not.
Source: Khaleej Times
