B2C Export Invoice for Duty-free business model

Our business overview:
We operate duty free stores at international airports in Riyadh, Dammam, Jeddah, and Madinah. Travelers moving out of Saudi Arabia purchase duty-free products from our stores in airports. Basis the fact that the goods are moving out of Saudi Arabia through these airports, we understand such transactions will be considered as zero-rated supplies and we need to issue simplified tax invoice.

Our Query
while submitting the XML files, we are getting some errors. Accordingly, we request your kind support in answering the below queries:
• As duty-free stores, all our customers are B2C customers where they purchase goods from the stores and fly to another country. Hence, as per our understanding such transactions will be considered export transactions, and we are obliged to issue simplified tax invoices. However, as per the business rule BR-KSA-31 of XML implementation, e-invoicing does not allow the issuance of an export simplified invoice for this scenario, may I request you to advise us on how such a transaction will be managed through e-invoicing?

We have attempted to validate the scenario involving the creation of a simplified export invoice (Invoice Type Code: 0200100). We aimed to verify the XML using the latest SDK 3.3, aligning with our business requirements. However, we encountered error BR-KSA-31, which indicates that only 3rd Party, nominal, and summary invoices are allowed for simplified tax invoices and notes. Kindly advise us, how to deal with such scenarios in our duty-free business.

• Further, as per the above scenario, if such transactions are treated as exports then it is necessary to provide the VAT exemption reason code and reason text. could you kindly advise which VAT exemption reason code and reason text should we select from the XML implementation guidelines code list as per our duty-free business model?

Looking forward to your prompt response.

Baset Regards,
Asmit

Facing a similar issue, did you find a solution to this?

@nandeeshgupta VAT Exemption / Exception Reason Code (BT-121) VATEX-SA-DUTYFREE can be used under VAT Category Code “Z” for qualified zero rated duty free supplies. VAT Exemption / Exception Reason text (BT-120) is Qualified Supply of Goods in Duty Free area التوريد المؤهل للسلع في الأسواق الحرة

You need to make Simplified Tax Invoice with Zero Rated and Code will be “VATEX-SA-DUTYFREE”

Z
VATEX-SA-DUTYFREE
Qualified Supply of Goods in Duty Free area
Zero rated goods/ التوريدات الخاضعة

Hello Dear,

Based on the request, ZATCA has updated the SDK and added a new VAT exemption reason code and text especially for Duty-Free services as stated by Mr. Ankit. also, quoting it below for reference: “VAT Exemption / Exception Reason Code (BT-121) VATEX-SA-DUTYFREE can be used under VAT Category Code “Z” for qualified zero rated duty free supplies. VAT Exemption / Exception Reason text (BT-120) is Qualified Supply of Goods in Duty Free area التوريد المؤهل للسلع في الأسواق الحرة”

You are kindly requested to update the SDK to the latest version, hopefully this will solve the issue.

Best
Asmit