Only way to create a prepayment adjustment invoice is explained in Section of the Guideline and there are literally millions of invoices already generated and submitted successfully based on explanation in the guideline.
Since you are unable to relate to the explanation in Guideline, consider inline responses to your query below:
Afterwards, a monthly progress invoice is sent with a positive turnover line and a negative prepayment line. Please note prepayment line should be populated with positive amounts, negative values are not allowed in line items. When you follow the formula provided in rule BR-CO-16 will ensure prepaid amount is substracted from invoice totals
The negative prepayment line has negative output VAT and is each month a percentage of the initial prepayment invoice, agreed upon in the contract.
As clarified above, amount must be provided as positive value, formula will substract this amount from Invoice Total Amount with VAT (BT-112) and arrive at Amount Due for Payment (BT-115).
We understand that the Fatoora portal requires that for the prepayment line on the e-invoice you mention the reference to the initial prepayment invoice for each monthly progress invoice. Yes correct, please refer rule BR-KSA-73. Same original prepaid invoice can be referred multiple times till all prepaid amount is adjusted from subsequent invoices
However, we noticed together with our solution provider that there is a special requirement for the invoice totals to ignore the taxable amount and VAT amount of the prepayment lines in the invoice totals.
Is this correct? Its not a special requirement, invoice totals are based on Global Standard for UBL 2.1 EN16931. Prepaid amount is adjusted only at last but one step (in BT-113 which is just one step before final amount due for payment is calculated in BT-115). In other words, prepaid amount adjustments will not reflect in sub-totals or Invoice totals until the final step which is Amount Due for Payment (BT-115)
Further on, we want to check if our approach , using the prepaid invoice tags is correct for this?
example:
initial prepayment invoice (386) 10.0000 SAR
Monthly progress invoice (388):
Turnover line 1.000 SAR (+15% VAT)
- Advance payment 100 SAR (+15% VAT)
It seems we are technically required to report in the invoice totals 1000 SAR taxable amount and 150 total VAT amount. What you are reporting is full XML untill step BT-115 which is Amount Due for Payment. This field represents final amount net of advance payment adjustment. What you will report is a breakdown of the net amount 1,035 (Monthly invoice SAR 1150 - Prepaid Amount SAR 115).
Altough, taking into account the prepayment lines with VAT, the totals should be 900 SAR taxable amount and 135 SAR VAT amount. Amount Due for Payment (BT-115) is 1035 based on calculations discussed above.