GAZT outlines requirements for VAT invoices


Riyadh, November 29, 2017:

The General Authority of Zakat and Tax have outlined the requirements for VAT invoices ahead of the introduction of VAT on 1st January 2018, with the aim of improving levels of tax compliance.

GAZT indicated that two types of invoices are outlined in the VAT Implementing Regulations. The first is a simplified tax invoice for the supply of goods or services with a total value of less than SAR 1,000, which must include the date of issue, the name, address and VAT identification number of the supplier, the statement of goods or services supplied, payment for goods or services, and a clear statement of the tax payable or indication that the total payment (consideration) includes the tax in respect of the supply of goods or services. A simplified tax invoice may not be issued with respect to internal supply or exports.

The second type of invoice is for transactions that exceed SAR 1,000, which require a more detailed invoice, as outlined in Article 53 of the Implementing Regulations. This invoice, which must be in Arabic in addition to any other language, must include the date of issue of the invoice, the serial number identifying and distinguishing the tax invoice, the supplier's VAT identification number, the customer's VAT identification number (if the customer is responsible for the calculation of the import tax and a statement thereof), the date on which the supply was signed, the name and address of the supplier and the customer, the amount and nature of the goods supplied, the scope and nature of the services provided, the amounts subject to tax at rate or exemption, the unit price excluding tax, and any discounts or rebates if not included in the unit price, as well as the applicable VAT rate and amount due in Saudi riyals.

According to the Implementing Regulations, every taxable entity is required to issue tax invoices when supplying goods or services subject to VAT, or any payments made in respect of the supply of goods or services. This helps businesses file their tax returns on time, and go through the required process for tax refunds on inputs.

GAZT confirmed that in the event of discounted prices on goods or services, VAT should be applied to the final discounted price, rather than the original amount. GAZT called on businesses to provide clear invoices that specify goods or services that are not subject to standard 5% VAT due to being exempt from VAT or zero-rated. 

GAZT stressed that businesses whose annual revenues exceed SAR 1,000,000 must register for VAT before 20th December 2017 to avoid financial penalties and the suspension of government services. All eligible businesses are urged to visit the VAT.GOV.SA website, which contains a VAT manual with a simplified explanation of the basic steps businesses need to undertake to implement VAT, as well as a wide range of tools and information to support businesses in achieving readiness.