VAT on Gold in Saudi Arabia: 15% Rule and Zero-Rated Bullion

Value Added Tax is the largest single addition to a Saudi gold invoice after the metal itself, and the rules around it are not intuitive. The same metal can be taxed at 15 percent or at zero depending purely on its purity and form.

The 15% VAT applies to gold jewellery. Investment gold of 99% purity or higher in tradeable form is zero-rated.

The Basic Rule

Saudi Arabia applies VAT at 15 percent, raised from the original 5 percent in July 2020. It applies to gold jewellery as a standard taxable supply, calculated on the full invoice value including both the metal and the making charge.

So a piece with 10,000 riyals of metal value and a 1,500 riyal making charge has a taxable base of 11,500 riyals, and the VAT is 1,725 riyals, bringing the total to 13,225 riyals. The tax is not applied to the metal alone, which is a common misunderstanding.

The Investment Gold Exception

Investment-grade gold is zero-rated rather than taxed. To qualify, the gold must be at least 99 percent pure and in a form traded on bullion markets, meaning bars, wafers and certain coins rather than jewellery.

This is a genuinely large difference. On a 100,000 riyal purchase, the VAT saved is 15,000 riyals. It is the main reason anyone buying gold to preserve wealth in Saudi Arabia should be looking at certified bars rather than jewellery, regardless of how the two compare on making charges.

Zero-rated is not the same as exempt in tax law, though for the buyer the practical effect is identical: no VAT line on the invoice. Ask the seller to confirm the purity and to state on the invoice that the supply is zero-rated investment gold.

What This Means for Different Buyers

If you are buying jewellery to wear, the VAT is unavoidable and should simply be budgeted for. Add 15 percent to whatever pre-tax figure you have calculated, and you will not be surprised at the counter.

If you are buying to store value, the choice between jewellery and bullion carries a combined cost difference of the making charge plus 15 percent VAT. On a large purchase that can easily reach a quarter of the amount invested, which is money that never comes back on resale.

If you are buying a gift, remember that the recipient’s resale value reflects metal content only, not what you paid including tax and labour. Buying a slightly lighter piece from a shop with lower making charges often gives more actual gold for the same total spend.

Worked Invoice Examples

Example one, a 21K necklace, 30 grams. At a metal rate of 460 riyals per gram, the metal value is 13,800 riyals. With a 14 percent making charge of 1,932 riyals, the pre-tax total is 15,732 riyals. VAT at 15 percent adds 2,359.80 riyals for a final invoice of 18,091.80 riyals.

Example two, a 50 gram certified bar at 999 purity. At a 24K rate of 526 riyals per gram, the metal value is 26,300 riyals. A 2 percent fabrication premium adds 526 riyals for a total of 26,826 riyals. VAT is zero, so that is the final figure.

Comparing the two on money spent per gram of pure gold makes the difference vivid, and it is the calculation most jewellery buyers never do.

Buying Second-Hand and Trade-Ins

When you sell gold back to a shop as a private individual, you are not making a taxable supply and no VAT applies to what you receive. What matters is the shop’s offer against metal value.

Trade-ins work differently and vary by retailer. Some apply VAT only to the difference in value between the old piece and the new one, others treat the transaction as a full sale. Ask before agreeing, because the treatment can shift the effective cost noticeably on a large exchange.

Visitor Refunds

Saudi Arabia has been rolling out VAT refund arrangements for departing visitors on eligible purchases. Where available, refunds require purchases from registered participating retailers, a valid passport presented at the time of purchase, correctly issued documentation, and validation of the goods and paperwork before departure.

Rules and participating retailers change, so a visitor planning a significant purchase should confirm the current position with the retailer at the time of buying and with the Zakat, Tax and Customs Authority. Do not assume a refund will be available after the fact.

Checking Your Invoice

A compliant tax invoice should show the seller’s VAT registration number, the date, the net weight and karat, the metal value, the making charge, the VAT amount as a separate line, and the total. If any of those are missing, ask for a corrected invoice.

Keep it. The invoice is your proof of weight and purity when you sell, your basis for any warranty or exchange claim, and your documentation if a refund is ever relevant.

Frequently Asked Questions

Is there VAT on gold bars in Saudi Arabia?

Investment gold of at least 99 percent purity in bar or wafer form is zero-rated, so no VAT is charged. Lower-purity bars do not qualify.

Is VAT applied to the making charge?

Yes. The 15 percent is calculated on the combined metal value and making charge, not on the metal alone.

Do I pay VAT when I sell my own gold?

No. A private individual selling personal gold to a shop is not making a taxable supply, so no VAT applies to the amount you receive.

Is 22K gold zero-rated?

No. 22K is 91.6 percent pure, below the 99 percent threshold, so it is taxed at the standard 15 percent rate.

Compare with the 24K rate or read the making charges guide to see the full cost of a jewellery purchase.