Why Pay to FTA using Visa card or Mastercard?!

Why not GIBAN and how does it make paying VAT and Excise Tax easier?

In a step to facilitate paying due tax, the FTA is introducing a new unique method of paying due tax as follows:

• A GIBAN is a unique IBAN number that is given to every taxable person
• A taxable person can make a fund transfer from certain UAE financial institutions using the GIBAN provided by the FTA
• This payment method can be used for settling any outstanding VAT and Excise Tax amounts payable, including tax and penalties

To pay the amount due using GIBAN, follow the below steps:

1. Login to FTA e-Services portal and obtain your GIBAN from the dashboard.
2. If using online banking to make the transfer of funds, log in to your bank account and add FTA as a beneficiary using the GIBAN number and FTA details. Note that you can also use GIBAN with other banking channels too (for example visiting your local branch).
3. Go to fund transfer / domestic transfer section of your online banking portal (this name may differ based on your bank account).
4. Enter the amount you wish to pay and proceed with the payment.
5. GIBAN will be validated and the transaction will be processed accordingly.
6. Once you complete the payment, login to e-Services and go to “My Payments” tab to check that the transaction has been reflected under the “Transaction History” box. This can take up to 24 hours to be reflected on your account.

VAT update

Tax returns and payments may be submitted 24 hours a day on the website,” Al Bustani said. “Taxable persons can visit the website, select the eServices portal, click on the “VAT” tab to access and fill the tax returns form. Users can then submit the tax return and proceed to paying the tax under the ‘Payment’ tab.

“Taxable persons may, at any time, request assistance from one of the FTA-accredited tax agents whose names are listed on the website.” The FTA said that although tax returns must be submitted electronically, accounting records and documents relating to business activities must be kept, including the balance sheet, profit and loss account, payroll records, wages, fixed assets, records, and inventory statements.

In addition to the payable (or repayable) tax for the period, returns must also detail the value of both standard-rated and zero-rated supplies made during the period, the value of exempted and reverse-charged supplies, and the value of any expenses incurred.

Preparing for UAE, KSA VAT

The poll prepared by our professional body, Association of Chartered Certified Accountants (ACCA) together with Thomson Reuters has found that there is a "significant lack of preparation and awareness".

Poll Results as follow;

• 44 % Lack in-house resources
• 49% still not ready
• 88% have not made any budget provisions.

The VAT regime in the UAE, KSA albeit GCC will have considerable impact on the business operations and profitability. Companies dealing in goods and services that attract the tax must understand and prepare for the implications. Similarly, entities that import goods or transact with Zero-Rate or Tax Exempt entities must, at an early stage, consider the impact of VAT. You need a better control or you may get in to the vicious cycle Group of companies with operations in other GCC countries must closely examine the impact of intra-group and cross-border transactions. While there is a unified VAT agreement across GCC, each member state has the right to enact its own laws within the broad framework. These different treatments have to be understood.

DON’T FORGET - VAT IMPACT

• Product pricing and profitability
• Cash flow funding for differences in payment and refunds – Very important to control this from day one.
• Transaction and reporting systems – In the fast changing Technology, one make a better decision from inception.
• Contracts relating to sales and procurement - Particularly long term contracts.
• Organisation training. Just awareness is not enough.

Get Ready for below 3 major events every quarter: or contact us to do all that you need to make you VAT Compliant at very low cost.

• Invoices with Tax
• Filing of Returns
• Maintaining Records

Invoicing with Tax

Hitherto most business did not have to account separately for tax and hence the invoicing was fairly simple and straightforward. Introduction of VAT will require the re-haul of the invoicing as well as the tax accounting modules in the existing software. Businesses will also have to record the supplier bills and their VAT registration number.

Filing of Returns

The accounting system will have to automate the computing and reporting of input credit and output liability. In most probability each country will have a portal for filing returns electronically using pre-defined formats. The IT systems will have to be modified to prepare the digital files for uploading to the government portals

Maintaining Records

The law will specify the period for keeping the records and these records will have to maintained for all transactions including the changes in master data. The IT system will also have to accommodate the recording of refunds and claims that may have happen in the future during audit.