Retention in contracting is an amount without VAT, that the client will keep on hold until the end of the project, how to address this amount in the E-Invoice?
The retention amount should be mentioned on the human readable invoice to reduce the final payable amount. It will not be included in the XML, and it will not reduce the Tax amount. This means that you will collect from the customer a lesser amount but pay the VAT based on the full amount.
At the end of the project you will issue a Commercial Invoice to collect the Retention amount(s), and at that point there is no VAT to be paid (as this has been paid already).
is this proposal confirmed by ZATCA ?
If we send the retention amount(s) invoice again to ZATCA, the receivables at ZATCA and our billing system will not match.
I have created a tax invoice for 1000 SAR with a VAT of 150.
The total invoice with VAT is 1150 SAR. The ZATCA receivable is 1150 SAR.
Retaining 10% of the invoice value, excluding VAT, is 100 SAR (the retaining amount without VAT).
My billing system shows 1050 receivables.
After creating an invoice to collect the retention amount (100 SAR), the receivable at ZATCA will be 1150 + 100 = 1250. In my system, it will be 1150.
Is there a way to handle this? Your suggestions would be greatly appreciated.
Thank you.