Gold Rate in Dubai & Abu Dhabi Today – Live

Analysis of Gold Prices in Dubai and Abu Dhabi Today

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What is the gold tax in the UAE?

The United Arab Emirates (UAE) imposes a 5% Value Added Tax (VAT) on the sale of gold and jewelry to consumers. This tax has been in effect since 2018 and applies to gold articles (such as rings and ornaments) when sold at retail. For example, when purchasing a gold item from a store in the UAE, an additional 5% of its value (the gold price plus craftsmanship) is added as tax to the final invoice. However, the UAE government has introduced special exemptions for investment gold to support the gold market and attract investors.

High-purity gold bars and coins (typically 24-karat gold with a purity of no less than 99.5%) are classified as “investment gold” and are exempt from the 5% tax on the gold content itself. In other words, buyers of these bars and coins do not pay tax on the value of the gold, but only on the manufacturing fees or the minimal certification charge added above the raw gold price.

Conversely, gold articles (such as 22 or 21-karat jewelry) are not considered investment gold and therefore remain subject to a 5% tax on the full price of the item. It is also worth noting that the reverse charge mechanism for VAT has recently been expanded in the gold and precious stones sector among VAT-registered traders. This mechanism allows the tax burden to shift from the seller to the buyer in business-to-business (B2B) transactions, facilitating the trading of gold among wholesalers without applying the 5% tax each time. However, for individual buyers from jewelry shops in the UAE, the final tax remains 5% on their purchases of gold articles.

This approach keeps the UAE market attractive, as the taxes on gold are low compared to other countries (for instance, taxes on gold and jewelry in some countries may exceed 10–20%, whereas in the UAE it is only 5%).

What Is the Craftsmanship Fee and How Is It Calculated in Gold Sales?

In the context of the gold market, the “craftsmanship fee” refers to the manufacturing cost and artistry added to the raw gold price of the item being sold. It is the amount charged by the goldsmith for transforming pure gold into a finished piece (such as a ring, bracelet, necklace, etc.). This fee is added to the price per gram of gold at the time of sale and varies from piece to piece based on several factors affecting its cost. Some of the key factors include:

• Design and Complexity of the Piece: The more intricate and detailed the design—featuring elaborate engravings or patterns—the higher the craftsmanship fee. Larger pieces or complete sets with abundant ornamentation require extra effort in manufacturing.
• Gold Purity Used: The purity of the gold affects the fee; often, pieces made from lower karat gold (such as 18 karat) incur relatively higher craftsmanship fees compared to those made from higher karat gold (like 21 or 22). This is because lower purity items may require special designs or additional enhancements.
• Brand and Country of Origin: Jewelry from well-known or imported brands may have higher craftsmanship fees compared to simpler, locally made pieces, as some companies factor in the cost of their brand name and the quality of the finish.
• Operating and Store Costs: The fee also takes into account fixed costs such as shop rent, employee salaries, electricity, stamping, and inspection fees. These costs are distributed across the price of the sold items as part of the craftsmanship fee.
• Skill of the Goldsmith and Artistry of Execution: Handcrafted items made by highly skilled artisans may have a higher fee to reflect the effort and artistic expertise involved.

Sometimes—especially for heavier pieces, large sets, or items encrusted with gemstones—the seller and buyer may negotiate a fixed total amount for manufacturing costs instead of calculating it per gram. In any case, buyers are advised to ask the seller for a clear breakdown of how the craftsmanship fee is computed to ensure transparency. It is also noteworthy that, according to UAE tax regulations, if the craftsmanship fee is listed separately on the invoice, a 5% tax is applied to it independently of the gold. However, if the overall price (gold plus craftsmanship) is presented as a single item, the tax is typically included in that total. These accounting details tend to concern traders more than the average buyer, since consumers ultimately pay the full final price regardless of whether the fee is itemized.

In contrast, the craftsmanship fee on gold bars and coins (often referred to as a “premium” rather than a craftsmanship fee) is very minimal. This premium is more akin to packaging and shipping fees, plus a small profit margin for the dealer.

When purchasing a gold bar (24 karat) or a gold coin, the price is usually calculated based on the global price of pure gold with almost no craftsmanship fee, followed by a slight manufacturing cost. This cost—ranging from zero to a few dirhams per gram—depends on the size of the bar: the larger the bar, the lower the relative manufacturing cost.

For example, the premium on a 1-kilogram bar might be less than 1% of the gold price, whereas for a small 5-gram bar, it could be a few percent. This additional cost generally includes the purity certificate, packaging, and a limited profit for the seller.

In practice, this means that the cost of purchasing a gold bar is very close to the global gold price with only a minimal additional charge. As a result, investors view bars and coins as a means to acquire gold at a price nearly identical to the international market rate, without significant losses due to craftsmanship fees—unlike jewelry.

Gold Making Charges in Dubai​

Gold markets in the UAE rely on the global price of gold as a daily pricing benchmark. A unified gold price is announced daily and clearly displayed in jewelry stores in Dubai. This price is for pure 24K gold (price per gram) in UAE Dirhams, derived from the global ounce price in dollars after conversion to Dirhams. Prices for other karats (22, 21, 18) are then calculated based on each alloy’s purity relative to 24K.

In essence, the price in the gold markets of Dubai and Abu Dhabi equals the global (local) price plus making charges plus tax. Since the UAE does not impose import duties or customs fees on gold—unlike some other countries—the local price remains very close to the global price, with only the aforementioned expenses added. The difference between the “global” gold price and the in-store price becomes evident when making charges and tax are added to the per gram price.

Making charges actually vary from one store to another. As mentioned earlier, the price difference between the global gold price and the shop sale price is about a 15%–20% increase for common items in 21 and 22 karats. This difference represents the goldsmith’s profit from the making charges in addition to the 5% VAT. It is also observed that the percentage increase for 18-karat pieces is higher, confirming that the relative making charges on lower karats are greater, as noted.

Overall, gold prices in the UAE are very close to global prices compared to many other markets, due to the policy of limited tax imposition and low profit margins in a competitive market like Dubai and Abu Dhabi. Officials in the Dubai gold market have confirmed that the making charges in the UAE are among the lowest in the world, making the final per gram price attractive to international buyers.

That said, offers or discounts on making charges may vary slightly between the Dubai market (which experiences fierce competition and a vast number of stores, especially in areas such as the Deira Gold Souk) and Abu Dhabi, where competition is less intense, although the price ranges remain very similar.

Analysis of Prices for Gold Jewelry Versus Bars and Gold Coins in the UAE

When comparing the purchase of gold in the form of jewelry (ornaments) versus gold bars and coins, the difference in making charges and added taxes becomes clear:

• Gold Jewelry: The buyer pays a higher price than the raw gold value, as they bear the full cost of the making charges in addition to the tax on the total amount. This implies that the resale value of the jewelry later on will be lower (usually based on the raw gold price without the making charges).
• Gold Bars and Coins: The buyer pays a price very close to the raw gold price, with only a minimal making charge margin. Consequently, the difference between the buying and selling price is much smaller compared to jewelry.

Differences in Making Charges Between Jewelry and Bars:

Notably, the making charges for bars and coins are relatively fixed or uniform per weight, whereas those for jewelry vary significantly depending on the design of the piece. The ratio of making charges to the gold price in jewelry is much higher than in bars. This is why the price per gram of gold in a bar is lower than its price in jewelry, even after tax. Moreover, in the UAE, tax is not imposed on pure gold in bars, providing an additional advantage for investors—they only pay tax on the minimal making charge component, as mentioned.

In general, it can be said that purchasing gold from the markets in Dubai and Abu Dhabi is advantageous for buyers looking to invest when opting for gold bars or coins, as they acquire gold at a price close to the global rate along with the benefit of tax exemption on the metal. Conversely, gold jewelry is suitable for those interested in adornment or gifting, where the buyer is willing to pay the making charges for a unique, ready-to-wear piece. Nevertheless, the prices of gold jewelry in the UAE remain highly competitive on a global scale due to the lower making charges compared to many other markets.