Prepayment Adjustment

XML and business rules
1

Is it mandatory to allocate the prepayment invoice with tax invoice and cleared with Zatca.

Or it will effect the tax payment for that period?

2

@mohan_manakkal question is not very clear. Hope it gets clarified with below details:

  1. When a Prepaid Invoice (Invoice Type Code 386) is issued, it will be sent to ZATCA for Reporting / Clearance. This invoice should also be considered while filing VAT Return for the corresponding period as VAT becomes due upon receiving payment in advance.

  2. When a subsequent invoice is generated and seller wants to adjust the amount already received in advance (under prepaid invoice as referred in 1 above), then such adjustment should be made using the UBL tags as explained in Section 8 of https://zatca.gov.sa/en/E-Invoicing/Introduction/Guidelines/Documents/E-Invoicing_Detailed__Guideline.pdf.

Once this is done, you can consider only the net amount (after adjusting prepaid amount) in the VAT Return.