- UAE FTA released Public Clarification VATP041 on April 11, 2025, replacing VATP036
- Clarification addresses VAT treatment for international banking charges via SWIFT
- Fees paid by UAE banks to overseas banks for SWIFT messaging are “Concerned Services”
- Reverse charge mechanism applies; UAE banks must account for VAT as supplier and recipient
- Normally requires a tax invoice for each transaction; impractical for numerous SWIFT messages
- FTA allows “Qualifying SWIFT Message” to replace formal tax invoice if it includes specific details
- Required details: names and addresses of banks, transaction date, reference number, service description, amount, and currency
- SWIFT message satisfies documentation for reverse charge accounting if details are present
- Input VAT on charges can be recovered if services support taxable outputs
- Recovery requires Qualifying SWIFT Message and can be claimed in the first tax period of receipt
- Payment must be made or intended within six months of due date
- Provisions apply only to SWIFT messaging fees, not other “Concerned Services”
- VATP041 provides administrative relief while emphasizing record-keeping compliance
Source: mailchi.mp
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.
