UAE FTA Clarifies VAT Treatment for SWIFT Messaging Fees with New Public Clarification VATP041

• 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.

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