UAE Financial Institutions Allowed Input VAT Recovery Using SWIFT Messages: FTA Clarification

• UAE financial institutions can now reclaim input VAT based on SWIFT messages
• SWIFT messages can be used as the sole basis for input VAT recovery
• This change was made to address the unique situation faced by UAE financial institutions
• Previously, SWIFT messages did not meet UAE VAT requirements for a tax invoice
• Financial institutions no longer need to issue self-invoices for interbank services from foreign banks
• SWIFT messages must contain detailed information for input VAT recovery
• The clarification only applies to SWIFT transactions, leaving some ambiguity for other international financial services
• Self-issued tax invoices are not common for input VAT recovery under the reverse charge mechanism
• Most jurisdictions allow taxpayers to rely on a regular invoice for input VAT recovery.

Source: Aurifer

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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