- The Federal Tax Authority (FTA) published a VAT Public Clarification on Input Tax Recovery for Banks and exchange houses.
- The clarification provides guidance to financial institutions on recovering input VAT on international bank charges.
- The recipient of the services is considered the taxpayer (financial institution) and is responsible for VAT obligations.
- A tax invoice must be issued for each SWIFT transaction with interbank charges, except for high-volume transactions.
- The required details in SWIFT messages include the names and addresses of the non-resident bank and the UAE financial institution, transaction details, and consideration charged.
- Input tax can be recovered if the costs were incurred for making taxable supplies.
- The recovery can be done in the current or subsequent tax return if the relevant documentation is obtained and payment is made within 6 months.
Source: premier-brains.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.
