How do I issue a credit note under ZATCA Phase 2?

A ZATCA credit note is issued to adjust an existing Tax Invoice or Simplified Tax Invoice in circumstances permitted under the Saudi VAT regulations, such as cancellation or termination, changes to the consideration or nature of the supply, or return of goods.

The credit note must correspond to the type of original invoice and must include a Billing Reference ID linking it to the original invoice. ZATCA's technical documentation states that this reference is mandatory and that every credit or debit note must refer to the original invoice to which it relates.

The credit note is then processed according to the invoice type. In Phase 2, the relevant XML must contain the required invoice and security information and follow the applicable ZATCA clearance or reporting process. A credit note based on a Tax Invoice follows the Tax Invoice process, while a credit note based on a Simplified Tax Invoice follows the corresponding simplified process.

Key points

• A credit note adjusts an existing invoice under permitted VAT circumstances.
• It must reference the original invoice.
• The Billing Reference ID is mandatory.
• The credit note must correspond to the original invoice type.
• Required invoice and tax information must be included.
• A credit note based on a Tax Invoice follows the standard invoice process.
• A credit note based on a Simplified Tax Invoice follows the simplified reporting process.