What is GIBAN in UAE: A Complete Overview for VAT Payment

The United Arab Emirates (UAE) has implemented significant improvements in digitizing its tax procedures, including e-invoicing, digital record-keeping, and streamlined digital transfers of tax liabilities. These changes enhance the efficiency and convenience of tax compliance for both businesses and individuals.

One of the most noteworthy developments in this area is the introduction of GIBAN (Generated International Bank Account Number) by the Federal Tax Authority (FTA). GIBAN is designed to simplify VAT (Value Added Tax) payments.

This article provides a comprehensive overview of GIBAN, its importance, how it operates, and the benefits it offers to register taxpayers in the UAE.

What is GIBAN?

GIBAN stands for Generated International Bank Account Number. It is a unique International Bank Account Number (IBAN) specifically allotted to VAT-registered taxpayers in the UAE. GIBAN allows taxpayers to make payments to the FTA, ensuring that VAT, excise taxes, and associated penalties are settled efficiently and effectively.

The primary purpose of GIBAN is to streamline the payment process for VAT and excise tax obligations, offering a more user-friendly and digital approach. By leveraging GIBAN, the UAE government aims to enhance tax compliance and reduce the administrative burden on taxpayers.

Key Features of GIBAN

1. Unique Identification: Every VAT-registered taxpayer is assigned a unique GIBAN, which is linked to their Tax Registration Number (TRN). This ensures that payments are accurately credited to the correct taxpayer account.
2. Integration with Financial Institutions: GIBAN can be used to transfer funds from approved banks and exchange houses within the UAE. It is essential to use GIBAN strictly for tax payments to avoid complications.
3. Multiple Payment Methods: Taxpayers can utilize GIBAN for both local and international bank transfers, facilitating a flexible approach to settling tax liabilities.
4. Real-time Payment Tracking: Once a payment is made using GIBAN, taxpayers can easily check their transaction history through the FTA’s e-Services portal, providing transparency and accountability.
5. No Additional Fees: Unlike other payment methods that may incur transaction fees, payments made through GIBAN are free of additional charges, making it a cost-effective option.

How to Obtain GIBAN

1. Registration with the FTA: To obtain a GIBAN, taxpayers must first register with the FTA and receive their TRN. Upon registration, GIBAN will be generated and displayed in the taxpayer’s dashboard on the FTA e-Services portal.
2. Accessing the GIBAN: Taxpayers can log in to their FTA e-Services account to retrieve their unique GIBAN. It is crucial to note that separate GIBANs will be assigned for VAT and excise tax payments.

How to View Your GIBAN

To view your GIBAN, follow these steps:

1. Go to the official FTA e-Services website.
2. Log in using your Tax Registration Number (TRN) and the associated password.
3. Navigate to your dashboard.
4. Look for a section labeled "GIBAN" or "Generated International Bank Account Number."
5. Your unique GIBAN for VAT and excise tax payments will be displayed.

How to Use GIBAN for VAT Payments

Direct Payment at Banks and Exchange Houses

Steps: Taxpayers can visit their bank or exchange house, provide the GIBAN along with the amount to be paid, and complete the transaction.

Timeframe: Payments may take up to 24 hours to reflect in the taxpayer's account, so it is advisable to pay in advance to avoid late penalties.

Service Charges: Banks may charge a service fee ranging from AED 15 to AED 25, depending on the transaction value.

Local Bank Transfer via Online Banking

Steps:

1. Log in to the FTA e-Services portal and obtain the GIBAN.
2. Add the FTA as a beneficiary in your online banking system using the GIBAN.
3. Initiate the fund transfer, specifying the amount due.
4. Confirm the transaction and monitor the ‘My Payments’ section in the FTA portal for updates.

Time frame: Upto 24 hrs

Service Charges: Differs bank to bank based on transaction amount

International Bank Transfer

Steps

• Log in to the FTA portal and get your GIBAN.
• Visit your bank and provide the necessary details and SWIFT Number
• Ensure the bank sends the amount to the UAE, using an intermediary bank if necessary.

Timeframe: International transactions may take 3-4 days, so it’s essential to plan accordingly and make payments at least a week in advance of the due date.

Service Charges: Differs bank to bank based on transaction amount and also buying and selling exchange rates of foreign currency.

Note: To make an international transfer, the bank must be a member of SWIFT.

Advantages of Using GIBAN for VAT Payments

1. Timely Payments: GIBAN allows taxpayers to fulfil their tax obligations promptly, minimizing the risk of incurring late payment penalties, which can be as high as 5% of the overdue amount.
2. Cost Efficiency: By eliminating extra fees associated with credit card payments, GIBAN offers a more budget-friendly option for taxpayers.
3. Convenience: Taxpayers can manage their tax payments online, avoiding the need for physical visits to banks or exchange houses. This digital approach saves time and effort.
4. Centralized Payment Management: GIBAN provides a unified platform for managing various tax duties, allowing taxpayers to maintain a clear overview of their tax obligations.
5. Enhanced Compliance: The use of GIBAN helps taxpayers stay compliant with tax regulations by ensuring that payments are accurately tracked and recorded.

Conclusion

GIBAN has transformed the way VAT payments are made in the UAE, introducing a modern and efficient solution for taxpayers. By offering a unique identification system, a range of payment methods, and the elimination of extra fees, GIBAN makes tax compliance simpler and more accessible for all registered taxpayers. Whether through direct bank payments or online transfers, GIBAN provides a streamlined approach to fulfilling tax obligations, ultimately contributing to a more efficient tax administration in the UAE.