We provide Credit Cards to the customers, whereby they can do purchases through merchants, online transactions and others. The successful purchasing process will result in crediting their bank accounts. After the successful purchasing process was completed, the supplier (merchant holder, online store, application, … etc) who is responsible for providing the goods or the service might not be able to deliver to the customer for certain reasons (such as: item out of stock).
Accordingly, the supplier will do a Refund transaction to the customer either fully or partially at any time without any limitations to a certain timeframe, and since the original transaction was done by the Credit Card, the Refund transaction must be done also by the Credit Card. As a result, the customer’s Credit Card will get debited by the Refunded amount.
This process is a worldwide common practice and not restricted to KSA market.
Problem statement
The Credit Card issuance party (Visa, Master Card, …etc) cannot find the original transaction(s) which the Refund transaction should link to. Also, the process of issuing the Refund transaction doesn’t require linking it with the original transaction. Accordingly, the Refund transaction is being processed without the link to the original transaction.
Hereby, no validation exists on having the original transaction number nor even the Refund amount should not exceed the original transaction amount.
In this case, we are unable to control the Refund transaction through the source of the process cycle, which leads to a risk in issuing noncompliant Credit Notes due to inability to refer to the original transaction for this specific case as per the VAT regulations as well as the E-Invoicing requirements.
**We are seeking for ZATCA point of view on this **