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May 15, 2026

This Public Clarification outlines the Federal Tax Authority's position on accepting SWIFT messages as documentary evidence for VAT recovery by UAE financial institutions. It addresses international bank charges from non-resident banks, treated as imported 'concerned services' under the reverse charge mechanism of Article 48 of the VAT Decree-Law. Citing impracticality, the FTA permits using qualifying SWIFT messages instead of self-issued tax invoices, as allowed under Article 59(7) of the Executive Regulation. This facilitates input tax recovery, provided the message contains specific details and aligns with general recovery rules in Articles 54 and 55.

VATP036

VAT Public Clarification

SWIFT messages

Issue

Banks and exchange houses (collectively referred to as financial institutions) may only recover VAT imposed on international bank charges from banking institutions outside the UAE to the extent such costs are incurred to make taxable supplies and provided the financial institutions obtain and retain the required supporting documents.

In practice, such international bank charges and their underlying transactions are evidenced by SWIFT messages which do not meet the requirements to constitute tax invoices for UAE VAT purposes.

This Public Clarification clarifies the Federal Tax Authority's (FTA) position on the acceptability of SWIFT messages for the purposes of documentation requirements and to support input tax recovery.

Summary

As taxable persons, when financial institutions receive interbank services from non-resident banks, they are regarded as making supplies to themselves in respect of these interbank services and are required to issue tax invoices to themselves in respect of these supplies. These financial institutions shall also be responsible for all other applicable tax obligations and to account for the due tax.

Financial institutions may only recover the related input tax to the extent the cost is incurred to make taxable supplies and provided that the required supporting tax invoices are obtained and retained. Considering the volumes of SWIFT messages UAE financial institutions receive on a daily basis, it would be impractical to require financial institutions to issue a tax invoice to themselves for each SWIFT transaction.

Provided the SWIFT message contains sufficient information to establish the particulars of the supply, UAE financial institutions are not required to issue a tax invoice to themselves in respect of interbank services received from a non-resident bank and for which such SWIFT Communication has been received.

Detailed analysis

Financial institutions are entitled to recover input tax to the extent the cost was incurred for the purpose of making taxable supplies.

The input tax may then be deducted through the tax return relating to the first tax period in which the financial institution received the tax invoice in respect of the supply and pays the consideration or part thereof.

Receipt of Concerned Services

Financial institutions incur international bank charges from banking institutions outside the UAE as a result of using the Society for Worldwide Interbank Financial Telecommunications (SWIFT) communication system with these non-resident banks.

The provision of the right to use the SWIFT communication service constitutes a service for VAT purposes.