The General Authority of Zakat and Tax (GAZT) has determined the requirements of the VAT or tax invoice before the implementation of the VAT on 1 January 2018 to improve tax compliance levels.
GAZT stated that two types of invoices were specified in the VAT Implementing Regulation.
The first is a simplified tax invoice for the supply of goods and services with a value less than SAR 1,000, which must include the date of issue, the supplier’s name, address, and VAT ID number.
When it is supplied, an indication of the payment of goods and services and a clear statement of the tax to be paid or the sum of the total payment (cost) relating to the supply of goods or services.
A simplified tax invoice cannot be issued for internal supply or export.
The second invoice type is for transactions exceeding 1,000 SAR, which require a more detailed invoice, as specified in Article 53 of the Implementing Regulation.
In addition to another language, this invoice must contain the invoice date of issue, the serial number identifying and distinguishing the tax invoice, the supplier’s VAT ID number, and the customer’s VAT ID number, the date and signature of the supply, the name and address of the supplier and the customer, the quantity and nature of the supply, the extent and nature of the guarantee or with the discounts including the applicable VAT rate and amount in Saudi Arabia.
General Authority of Zakat & Taxation (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 supply.
Invoice credit or debit notes should contain a reference to the original sales invoice number and include discount details.