UAE: Tax authority clarifies VAT treatment of SWIFT transactions
The Emirati Federal Tax Authority (FTA) issued Public Clarification No. VATP041, providing updated guidance on VAT invoicing and input VAT recovery for transactions involving the Society for Worldwide Interbank Financial Telecommunications (SWIFT). This clarification replaces the earlier Public Clarification No. VATP036.
Key topics addressed include:
-
Invoicing and documentation: The clarification outlines the requirements for issuing tax invoices related to SWIFT messages and the documentary evidence needed for input VAT recovery.
-
International charges: It clarifies how to treat international bank charges incurred by UAE financial institutions when transacting with foreign banks through the SWIFT system.
-
Use of SWIFT messages as records: The FTA confirms that under certain conditions, SWIFT messages may be accepted as sufficient documentation, removing the obligation to issue individual tax invoices for each transaction.
-
Input VAT recovery: The document explains the criteria for financial institutions to recover input VAT on related costs.
-
Place of supply and reverse charge: A detailed analysis is provided on the place of supply rules for services received from outside the UAE and the application of the reverse charge mechanism.
Source: gov.ae
VAT/GST rates 2024 in Asia
| Country | Standard VAT/GST Rate | Reduced Rates |
| Armenia | The standard VAT rate is 20%. | |
| Azerbaijan | The standard VAT rate is 18%. | |
| Bahrain | From January 1, 2022, the standard VAT rate is 10%. | |
| Bangladesh | The standard VAT rate is 15%. | 10%, 7.5%, 5%, 2,4%, 2% |
| Brunei | There is no VAT in Brunei. | |
| China | The standard VAT rate is 13%, 9%, 6% | Reduced rates of 5%, 2%, 3%, 1.5% and 0.5%. |
| UAE | VAT is charged at 5% in the United Arab Emirates (UAE) | |
| Georgia | The standard VAT rate is 18% | |
| Hong Kong | There is no VAT or sales tax in Hong Kong. | |
| India | The primary rates of Indian GST are 0.25%, 1.5%, 3%, 5%, 12%, 18% and 28% | |
| Indonesia | The standard VAT rate is 11% | |
| Iraq | There is no VAT in Iraq. (The standard sales tax ranges from 10% to 300% on alcohol & tobacco) | |
| Israel | The standard VAT rate is 17% | |
| Japan | The standard (Consumption Tax) rate is 10% | 8% |
| Kazakhstan | The standard rate of VAT is 12% | |
| South Korea | The standard VAT rate is 10% | |
| Kuwait | There is no VAT in Kuwait | |
| Laos | The standard VAT rate is 10% | |
| Lebanon | The standard VAT rate is 11% | |
| Malaysia | On September 1, 2018, the Government of Malaysia replaced the Goods and Services Tax (GST) with a 10% Sales Tax (The standard rate of service tax is 8%) | 5% (Sales Tax), 6% |
| Oman | the standard VAT rate in Oman is 5% | |
| Pakistan | Pakistan does not have VAT. The standard sales tax rate is 18% | Pakistan has a large number of reduced sales tax rates, including 1%, 2%, 5%, 10% and 12% (among others). |
| Philippines | The standard VAT rate is 12% | |
| Qatar | There is no VAT in Qatar | |
| Russia | The standard VAT rate is 20% | 10% |
| Saudi Arabia | VAT is charged at 15% | |
| Singapore | The standard Goods and Services Tax (GST) rate is 9% | |
| Sri Lanka | The standard VAT rate is 18% | |
| Taiwan | The standard VAT rate is 5% | |
| Tajikistan | The standard VAT rate is 14% | 10%, 7%, 5% |
| Thailand | The standard VAT rate is 7% (Reduced from the standard 10% until 30 September 2024) | |
| Turkey | The standard VAT rate is 20% | 10%, 1% |
| Uzbekistan | The standard VAT rate is 12% | |
| Vietnam | The standard VAT rate is 8% | Reduced VAT rate is 5% |