Promotional discount

XML and business rules
1

محتاج اعمل خصم ترويجى للمنتجات
واعلم ان الخصومات تتم قبل حساب الضريبة
فهل يوجد حد اقصى للخصومات الترويجية خلال السنة
واذا كان يوجد ما هو الحد الاقصى ؟
وكيفية تنفيد الخصم على ملف xml
بعد تخطى الحد الاقصى للخصومات

I want to apply a promotional discount on products,
and I understand that discounts are applied before calculating VAT.

1. Is there a maximum limit for promotional discounts during the year?
2. If yes, what is the maximum limit?
3. How can I implement the discount in the XML invoice file if the discount exceeds the allowed limit?

2

@AmrSobhy for question 1 and 2 please refer Article 15 of KSA VAT Regulations https://zatca.gov.sa/en/RulesRegulations/Taxes/Documents/Implmenting%20Regulations%20of%20the%20VAT%20Law_EN.pdf

For question 3, when the the value of free of charge items exceeds the threshold for Nominal Supply defined in Article 15 of VAT Regulations, you just have to generate an invoice (same as a regular invoice) with Invoice Type Transaction Code (NNPNESB code) with 4th position ‘true’. Example, 0201000. You can find sample XML for Nominal Supply in SDK.

3

Thank you @Ankit.K.Tiwari for your response.
Please note that we do not intend to offer the product entirely for free as a gift.
Let me clarify with an example based on our actual practice:

We are a school that issues simplified tax invoices to students.
We have 1,000 students, and we would like to apply a 10% discount for each student who pays the tuition fees early.

However, if we calculate the total value of the 10% discount for all students, it will exceed the SAR 50,000 limit allowed for promotional discounts.

In this case, what should we do?

Please note that we issue the invoice with the full tuition fee amount, and if a student pays early, we then issue a credit note for the discount value.

4

@AmrSobhy please refer paragraph 5.4 of guideline https://zatca.gov.sa/en/HelpCenter/guidelines/Documents/Business%20promotions.pdf

Please check the tax position with your tax team. If you decide that Nominal Supply provisions are not attracted, then show the discount just like any other invoice with discounts (allowance charge amount with indicator ‘false’).