A comprehensive guide on VAT invoicing in Saudi Arabia

Overview 

Every VAT registered business owner must produce invoices for each taxable sale, containing certain information related to the tax and revenue collected.

Time limit for issuing invoices

Tax invoices must be sent to the customers on or before the 15th of the month after the month in which the transaction occurred. For example, if a sale takes place on the 20th of January, the invoice must be issued on or before the 15th of February. 

Details required on tax invoices for supplies over 1,000 SAR

A tax invoice must contain the following information in Arabic:

• Date on which the invoice was issued and date of supply (if they are different)
• A unique sequential invoice number for identification purposes
• Seller’s legal name, address, and tax identification number
• Customer’s legal name, address, and tax identification number, and if the customer is self-billing, a statement that the seller and customer have agreed to self-billing of VAT
• Type, quantity and description of the goods sold, or description of the services provided
• Unit price of the goods sold, excluding taxes
• Discounts or rebates provided (not included in the unit price)
• The total tax amount payable in SAR
• Method of calculating VAT (zero-rate, exemption or margin scheme)
• Method of calculating profit margin

Simplified VAT invoices for supplies under 1,000 SAR

If a supply is not classified as an export or an internal supply, and the value of the transaction is under 1,000 SAR, then the business can use a simplified tax invoice format containing the following details: 

• Date on which the invoice is being issued 
• Seller’s legal name, address, and tax identification number
• The description of goods or services being sold
• The amount payable for the goods or services sold and mentioned on the invoice
• VAT amount due, if the total payable excludes tax, or a statement that the VAT is included in the amount payable

Currency used in invoices 

The base currency of all invoices should be in Saudi Riyals (SAR). If a transaction takes place in any other currency, then the taxpayer must convert it to Saudi Riyals using the daily conversion rates provided by the Saudi Arabian Monetary Authority (SAMA) on the date the tax is due. 

Self-billing under VAT

When a customer, instead of a seller, produces an invoice to document the input tax paid on a transaction, it is known as self-billing. Both the customer and the seller must agree to use self-billing for the transaction, and the seller must also agree not to produce a tax invoice.