SWIFT Messages Accepted for VAT Documentation and Input VAT Recovery

• The United Arab Emirates (UAE) Federal Tax Authority (FTA) has issued a clarification regarding the acceptability of SWIFT messages for VAT documentation requirements and input tax recovery conditions.
• This clarification is relevant for financial institutions registered in the UAE that receive interbank services through the SWIFT communication system from non-resident banks.
• The FTA states that SWIFT messages used to evidence international bank charges and their underlying transactions will be sufficient for satisfying the tax documentation requirements and input tax recovery conditions, as long as they meet certain requirements.
• Financial institutions are required to issue tax invoices to themselves for interbank services received from non-resident banks and account for the due tax using the reverse charge mechanism.
• SWIFT messages that meet certain requirements will be accepted as tax invoices for UAE VAT purposes, allowing for the recovery of input tax paid.
• The required information on the SWIFT message includes the name and address of the non-resident bank, the name of the UAE financial institution receiving the service, the date of the transaction, the SWIFT message reference number, and the transaction reference number.

Source: insightplus.bakermckenzie.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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