It is an official document issued by the supplier/seller to the purchasing party customer/buyer when selling goods or services subject to value-added tax (VAT) in the Kingdom of Saudi Arabia. This document is used to prove the sale and determine the amount of tax due on that transaction.
For example, let’s say a company purchases goods or services from another company for an amount more than 1,000 Saudi riyals or less just should be between two companies, a tax invoice must be created that includes all the data of the two companies (company name, tax registration number, address, phone number, ….)
Under what circumstances should a tax invoice be issued or utilized?
- It applies to buying and selling transactions between companies only.
- When selling goods or services subject to or not subject value added taxÂ
- When importing goods or services subject to or not subject to value added tax
- When exporting goods or services subject to or not subject value added tax
- When maintaining tax records
Structure and information found in a tax invoice:
It is advisable to incorporate the following information into a tax invoice with unrequired fields ensuring accuracy and compliance with Zatca tax regulations:
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- The invoice issue date must be listed
- Each invoice may not have its own unique number
- The seller’s name must be as registered in the electronic invoicing system
- The seller’s tax registration number must be listed on the invoice
- Order or customer reference number
- The description (name, quantity, unit price, Value tax rate, Taxable amount, discount, Value tax amount, subtotal total) of the goods or services sold must be general
- The total invoice value including tax must be stated on the invoice
- The total invoice value excluding tax must be stated on the invoice
- The tax invoice must be issued in Arabic
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