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Is VAT Included in Bank Fees & Charges in the UAE?
March 5, 2024

The answer is YES! Bank fees and charges in the UAE are subject to VAT at a standard rate of 5%. .


(VAT) Value Added Tax is a consumption tax levied on the supply of most goods and services in the UAE, with a standard rate of 5%.

This tax applies to certain bank services as well.

Common bank services subject to VAT include:

Banks typically charge VAT on fees associated with:

  • Account Management: This includes fees for opening or closing an account, monthly maintenance charges, and bank statement issuance fees.
  • Transactions: Fees for international transfers, wire transfers, cash withdrawals (from ATMs or teller counters), cheque issuance, and stop-payment orders on cheques may be subject to VAT.
  • Card Services: Annual fees for credit and debit cards, as well as cash advance fees, could also include VAT.
  • Subscriptions for priority services
    Other service fees specific to your chosen transactions

Identifying VAT on Bank Statements:

In most cases you will not receive an invoice for these fees, so you need to assume they are inclusive of 5% VAT within your VAT return.

Since most banks don’t issue separate invoices for these fees, it’s important to understand how VAT is reflected on your bank statement:

  • Inclusive Pricing:

In most cases, the bank fee you see on your statement will already include the 5% VAT.
It might not be explicitly mentioned, but you can assume it’s factored into the total amount.

  • Separate Line Item (less common)

You might not always see a separate line item for VAT on your bank statement.

However, in some cases, the bank statement might show the service fee and the corresponding VAT amount as separate line items.

VAT Returns and Input Tax Recovery:

If you’re a registered business for VAT purposes, you may be able to claim input tax recovery on the VAT you pay on bank charges.

To do this, you’ll need to keep proper records of your bank statements that show the VAT amount.
However, it’s important to consult with a tax professional to determine your eligibility for input tax recovery based on your specific business activities.

Finding the Bank’s Tax Registration Number (TRN):

Your bank statement should display their Tax Registration Number (TRN) at the bottom. This unique number identifies the bank for VAT purposes.

The TRN is a unique identifier assigned by the Federal Tax Authority (FTA) to businesses registered for VAT.

You may need this number for your VAT return purposes, especially if you’re claiming input tax recovery.

For VAT advice or bookkeeping support, please get in touch.

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Information provided on the site is merely guidance that may change in line with UAE law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Theta7 is a trading name for THETA 7 Accounting & Bookkeeping L.L.C, an authorised & licensed accounting firm under the Ministry of Economy and the Federal Tax Authority of the United Arab Emirates.
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