VAT q&a: 'A GIBAN number appears on my FTA page. What is that?'

A GIBAN is a unique version of the IBAN number

Tax expert Lisa Martin answers the latest round of queries from readers. Photo: Getty Images

I’ve noticed a GIBAN number has suddenly appeared on my FTA dashboard (the page I land on when I log into my account on the FTA website). Can you tell me what it is please? LL, Abu Dhabi

The GIBAN is a unique IBAN number that enables you to make your VAT payments through most UAE banks. When you add the FTA as a beneficiary, you can use your GIBAN as the Payees account number. You can also use the GIBAN if you want to make payment at your bank.  Every time you make a payment the FTA recommend you log back into your FTA online e-service account 24 hours later to check that the payment has been received and correctly applied to your account. You can do this under Transaction History.

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I own a translation business and voluntarily registered for VAT in March, requesting that my VAT registration starts in May. My registration was approved, I have my TRN and the FTA dashboard shows that my first VAT return period is from May 1 to July 31 2018. As I already have my TRN should I be putting VAT on my invoices raised from the date I was notified by the FTA that  my business was registered ?   HI Dubai

Your first VAT reporting period starts from May 1 even though you have already been notified by the FTA that your registration has been accepted and you have been issued a TRN. So for any services performed in April you should not be issuing tax Invoices and you should not charge your clients VAT.     All work done from May onwards should be charged on a tax invoice with VAT.  Your revenues for VAT reporting should include only work done from May onwards.  Any money received in May relating to April or earlier work should not be counted.

One thing to note is that Article 56 of the law allows for VAT that you have paid before registration to be deducted on your first VAT return where those purchased goods and services were used to make taxable supplies, post registration.

So, for example, if at the end of April you received a VAT invoice for renewal of your annual trade license covering the period May 2018 to April 2019, you can reclaim that VAT even though the supplier invoice would be dated before your VAT registration starts. So retain all your VAT invoices and receipts for and include these on your first VAT return.

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Our business sells some products and services through an online voucher site. Customers buy a voucher that they then exchange for our goods and services. We show prices on the website without any separate charge for VAT. Are we required to show a separate VAT charge or are we liable to pay VAT out of the prices charged? PD, Dubai

I am assuming from your question that the voucher is purchased for a specific product or service rather than being more like a gift card, which could be used to purchase a variety of items. Therefore, if you do not show any separate VAT amount, the amount paid by the customer is assumed to be inclusive of VAT and you pay VAT on the price charged. You calculate the VAT and net revenues on a tax-inclusive price as follows. The VAT is equal to 5/105 of the total paid by the customer, and the amount to record as your revenue is 100/105. This is different to taking 5 per cent of the amount the customer paid, and if you calculate it as 5 per cent of the total you will pay over too much VAT.

A couple of other relevant points worth mentioning on these types of sales that go through online platforms.  Article 26 of the VAT Law states that the date of a supply of a voucher is the date of issuance or supply of the voucher. It is important that you account for your sales VAT on the correct VAT return, and the date the voucher is issued may be different from the date you get paid by the website provider.

Website providers will usually charge you a fee for using their sales platform, which is typically as a percentage of the sales you generate through their site. They will pay you the net amount of the revenue after deducting any credit card charges and their agreed fees. You need to account for the costs and revenues separately on your VAT return and show the input and output tax in the correct return fields.

Lisa Martin, a chartered accountant with over 20 years commercial finance experience, is the founder of accounting, auditing and VAT consultancy, The Counting House. Email any VAT queries to [e-mail]