Saudi VAT on Investment Metals: Gold, Silver and Platinum

Gold, silver and platinum do not always have the same VAT treatment. Article 36 distinguishes qualifying metals, investment form, the producer/processor’s first supply and specified possession rights. Jewellery, industrial metal and processing services can follow different routes. Establish the asset and transaction before relying on a 0% invoice.

Identify the metal and the investment-form conditions

Article 36(3), p. 34, defines qualified metals as gold, silver and platinum. Investment treatment requires purity of at least 99% and tradability on the international bullion market. Calling a product investment gold does not prove these conditions.

ZATCA’s Investment Metals Sector guideline, issue 2 May 2026, sections 4–5, pp. 10–16, explains the distinction. Retain assay/purity, product form, tradability and actual transaction evidence. Other precious metals are not added to Article 36’s named list merely because investors trade them.

An item can contain a qualifying metal without being a qualifying investment-form supply. Jewellery and industrial granules therefore require their actual classification and any separate first-supply/export rule considered.

Separate the producer or processor’s first supply

Article 36(1) zero-rates the first supply of a qualified metal by its producer or processor. Paragraph (3) defines the producer’s extraction activity and processor’s refining/treatment activity. Guideline section 4.3, pp. 13–14, explains that this first-supply route is distinct from investment-form qualification.

Example 5, p. 14, follows raw gold from a producer through a trader to a processor, then investment bars through a trader to a bank. The producer’s first sale is zero-rated; the intervening raw-metal resale is standard-rated on the stated non-investment facts; the processor’s qualifying first supply and later investment-bar supply can be zero-rated.

Dariba analysis: identify why each leg qualifies. A trader’s first sale from its own stock is not necessarily the producer/processor’s first supply. Conversely, failure of that first-supply route does not preclude a genuinely qualifying investment-form or export route.

Allocated goods and unallocated rights require different analysis

Section 4, pp. 10–11, distinguishes ownership/disposal of specified tangible metal from an unallocated quantity held without title to a particular bar. The first is assessed as goods; the latter can be services/rights with a different place-of-supply analysis.

Article 36(2) addresses granting, assigning or surrendering a right, interest or claim that transfers possession or confers a right to possession of qualifying investment metal. Do not infer that every financial certificate, derivative or cash-settled gold exposure meets that possession condition.

Example 1, p. 11, describes a foreign dealer’s unallocated ten-ounce sale for USD 12,500 and possible conversion into possession. It distinguishes the service/right analysis from a physical import. The customer’s foreign certificate and the metal’s vault location do not alone settle the actual right or tax rate.

A lease can qualify when the actual possession right does

Section 4.1, Examples 2–3, p. 12, considers a qualifying silver lease with a SAR 100,000 fee and an assignment of qualifying gold possession for SAR 50,000, with equivalent metal returned. The guidance treats these stated qualifying metal rights at 0%.

That does not make every metal financing fee, storage contract or unallocated product zero-rated. Establish the qualifying metal, investment form and possession right. The guideline’s later general statement about standard-rated unallocated services, p. 19, must be read with its earlier specific qualification discussion and Article 36(2).

Where the instrument’s rights are unclear, resolve the contract rather than select the most favourable isolated sentence. A cash-only price exposure can be materially different from a right to obtain qualifying metal.

Jewellery, industrial supplies and processing are different

Section 5.1, Example 6, p. 15, describes platinum supplied for refinery use that does not meet investment-form requirements and is standard-rated. Section 5.2, Example 7, p. 16, follows zero-rated investment bars into jewellery production and later standard-rated jewellery sales.

Section 5.3, Example 8, pp. 16–17, distinguishes cleaning/processing services on local metal from a supply of the metal itself, including services to a German owner. A foreign invoice address does not zero-rate physical local-goods work under Article 33.

Dariba original illustration: a SAR 20,000 net ordinary standard-rated cleaning service produces SAR 3,000 VAT. The underlying metal’s zero-rated sale classification does not automatically zero-rate that independent service.

Imports, exports and foreign-vault sales need their own route

Section 4.2, Example 4, pp. 12–13, explains import VAT exemption for actual qualifying investment metal, including platinum imported by a jewellery manufacturer on the stated qualification. A later non-qualifying use/supply still requires its own treatment.

Section 4.4 connects exports with Article 32 evidence. An export route cannot be established solely from the foreign customer’s address. See the goods-export guide for the required movement and evidence period.

Section 6.2, p. 19, distinguishes specified goods held abroad from services/rights. A foreign-vault goods sale can be outside Saudi scope; an unallocated service to a Saudi taxable customer can require reverse-charge analysis, including whether the particular right actually qualifies for a zero rate. Do not equate all offshore metal transactions.

Islamic finance requires substance and possession assessed

Article 29(4) can treat temporary title transfers within a genuine financing arrangement differently from a separate metal supply. Guideline section 6.1, Example 9, pp. 18–19, describes a platinum-based financing transaction where the customer does not obtain possession and the financing substance is analysed separately.

The example uses SAR 100,000 and SAR 120,000 financing amounts, but its shorthand table should not be converted into a universal exemption for every sale in every metal-financing structure. Current Article 29(4)‘s temporary-transfer conditions and the actual right to dispose matter.

See the financial-services guide for the distinction between financing consideration, explicit fees and actual goods. A Sharia-compliant label alone cannot decide the VAT result of every leg.

Preserve source qualification and conditional input recovery

Retain metal identity/purity, international tradability, producer/processor basis, possession rights, location/movement, service contracts and invoices. Zero-rating taxable metal supplies can support otherwise eligible input deductions under Article 49, subject to actual use, restrictions and evidence.

An import VAT exemption does not create an input credit for tax never charged. Nor does a financial investment automatically make every investor’s private expense a taxable-business cost. Where the business makes taxable and exempt supplies, attribute costs and apply the relevant mixed-use rules.

Dariba recommends recording the particular legal route on each metal/product type. First supply, investment form, possession right, export and financing substance are separate reasons requiring separate support.