Learn the basics of VAT Invoices in Saudi Arabia: FAQs

What are VAT invoices?

VAT invoices contain revenue and tax information about all taxable sales made by a business.

What is the last date to issue a tax invoice for a particular return?

Tax invoices must be issued before the 15th day of the month following the month when the transaction occurs.

For example, if the transaction occurs in June, the last date to invoice the transaction would be July 15th.

What are the fields required in a tax invoice?

A tax invoice must contain the following fields, in Arabic:

• The invoice issue date and date of supply (if different).
• A sequential invoice number.
• The supplier’s legal name, address, and TIN.
• The customer’s legal name and address. If the customers are self-billing, the invoice must also include their TIN and the statement that suppliers and customers have agreed to self-bill for VAT.
• The quantity and type of goods, or the extent and nature of services provided.
• The total amount of revenue eligible for VAT & exemption, and the VAT rates (5% or 0%) to be used.
• The unit price, exclusive of tax. Explanation of any discounts or rebates that are not included in the unit price.
• The total tax payable in SAR.
• Explanation of any supply where a zero-rated, exemption or margin scheme is used to calculate VAT.
• The profit margin method.

What is Reverse Charge Mechanism (RCM)?

The Reverse Charge Mechanism helps taxpayers to account for their input tax that has not been paid to the government before that period’s tax filing.

In the case of services, the Reverse Charge Mechanism is applied when a VAT-registered business imports a taxable service. The buyer is required to account for input VAT paid on the transaction.

How is VAT applied on the import of services?

The Reverse Charge Mechanism is applied on the import of taxable services by a VAT-registered business. Here, the buyer of the services has to account for the input VAT paid on the supply.

What are simplified VAT invoices?

Businesses can use simplified VAT invoices for goods and services whose value is under 1,000 SAR. However, these invoices cannot be issued for exports and internal supplies. Simplified VAT invoices must contain:

• The date of the invoice.
• The full name, address and TIN of the supplier.
• Description of the goods and services supplied.
• The total payable amount of the goods and services in the invoice.
• The tax payable, or an indication that the total payable amount includes VAT.

Can I issue invoices in currencies other than SAR?

No, invoices should always show monetary sums in SAR. If the transaction occurs in another currency, the taxpayer should convert the sum to SAR using the daily conversion rate provided by the SAMA (Saudi Arabia Monetary Authority) for the date the tax becomes due.