Dear All,
Please advise on the applicability and any potential implications of the below scenario for down payment postings.
Currently, the down payment is posted with a value of SAR 1,000 + SAR 150 VAT, and the corresponding invoice is reported to ZATCA with invoice type 386.
According to the ZATCA requirements, the subsequent invoice should reference the previously reported down payment. However, due to technical limitations in the customer’s current system, the customer is unable to link the subsequent invoice to the down payment.
As an alternative approach, the customer is proposing the following:
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The down payment is reported to ZATCA for SAR 1,000 + SAR 150 VAT.
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The subsequent invoice is uploaded without referencing the down payment, resulting in SAR 150 VAT due on the invoice.
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A separate DUMMY (does not have financial impact in the records)credit memo for SAR 150 would then be uploaded to offset either the down payment or the invoice. The credit memo would not be linked to a specific invoice/down payment.
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Accordingly, the overall VAT impact would be: SAR 150 (down payment) + SAR 150 (invoice) – SAR 150 (credit memo) = SAR 150 net VAT.
Could you please advise whether this approach is acceptable from a ZATCA compliance perspective and whether there are any potential tax, reporting, reconciliation, or audit implications that should be considered before proceeding with this solution?
Your guidance on the applicability of this approach would be highly appreciated.