# Cancelation of Prepayment Tax Invoice

**URL:** <https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583>\
**Category:** General\
**Created:** [May 10, 2024, 7:27am UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583 "2024-05-10T07:27:47Z")\
**Posts on this page:** 7\
**Page:** 1

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**Author:** ![shivangi.garg](https://avatars.discourse-cdn.com/v4/letter/s/ce73a5/32.png) [@shivangi.garg](https://zatca1.discourse.group/u/shivangi.garg)\
**Post date:** [May 10, 2024, 7:27am UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583/1 "2024-05-10T07:27:47Z")

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Hi,

My customer recently generated an e-invoice for a prepayment voucher but inadvertently provided an incorrect Buyer’s VRN (VAT Registration Number). As a result, they now wish to cancel the generated prepayment tax invoice and issue a new one with the correct VRN.

Please guide the steps to cancel the prepayment tax invoice on the ZATCA portal.

@Ankit.K.Tiwari Your insights and assistance in this matter would be greatly appreciated.

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**Author:** ![Ankit.K.Tiwari](https://avatars.discourse-cdn.com/v4/letter/a/9d8465/32.png) [@Ankit.K.Tiwari](https://zatca1.discourse.group/u/Ankit.K.Tiwari)\
**Post date:** [May 12, 2024, 2:44pm UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583/2 "2024-05-12T14:44:50Z")

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@shivangi.garg , you can reverse the transaction by passing credit note with exactly same content as that of the invoice (including prepayment adjustment related lines).

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**Author:** ![adelaraby](https://avatars.discourse-cdn.com/v4/letter/a/bcef8e/32.png) [@adelaraby](https://zatca1.discourse.group/u/adelaraby)\
**Post date:** [June 2, 2024, 4:02pm UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583/4 "2024-06-02T16:02:33Z")

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in this case ,you should consider the prepayment as a normal Tax invoice and you are making return for it (credit note). you will mention the Prepayment in the header of the invoice only

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**Author:** ![shivangi.garg](https://avatars.discourse-cdn.com/v4/letter/s/ce73a5/32.png) [@shivangi.garg](https://zatca1.discourse.group/u/shivangi.garg)\
**Post date:** [June 2, 2024, 4:02pm UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583/5 "2024-06-02T16:02:40Z")

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Hi @Ankit.K.Tiwari  
Thank you for your response. I understand that we need to generate a credit note against the prepayment voucher to cancel it. However, from an accounting perspective,

- Buyer has credit balance in case of prepaid amount
- Buyer has debit balance in case of sales transaction
- Buyer has credit balance in case of credit note

In the case of sales transactions, the buyer typically has a debit balance, making it straightforward to settle the **credit balance of the prepayment** with the **debit balance of the sales** transaction.

However, when we issue a credit note against the prepayment voucher, the buyer ends up with a credit balance. In this scenario, I’m unsure of how we can settle the **credit balance of the prepayment** amount with the **credit balance of the credit note.**

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**Author:** ![Embro](https://avatars.discourse-cdn.com/v4/letter/e/bc79bd/32.png) [@Embro](https://zatca1.discourse.group/u/Embro)\
**Post date:** [June 2, 2024, 4:02pm UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583/6 "2024-06-02T16:02:47Z")

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Normal Credit note to be Issued to cancel the prepayment invoice  
in Credit note: you will mention …BillingRefernce = prepayment invoice

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**Author:** ![shivangi.garg](https://avatars.discourse-cdn.com/v4/letter/s/ce73a5/32.png) [@shivangi.garg](https://zatca1.discourse.group/u/shivangi.garg)\
**Post date:** [June 5, 2024, 9:08am UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583/7 "2024-06-05T09:08:51Z")

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@Embro thanks for the response. So, does a normal credit note mean no need to generate e-Invoice?

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**Author:** ![Embro](https://avatars.discourse-cdn.com/v4/letter/e/bc79bd/32.png) [@Embro](https://zatca1.discourse.group/u/Embro)\
**Post date:** [June 9, 2024, 9:57am UTC](https://zatca1.discourse.group/t/cancelation-of-prepayment-tax-invoice/1583/8 "2024-06-09T09:57:25Z")

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sure you must issue E-Invoice … Type is …Creadit note  
by the value of the balance of the prepayment.