As for medical services covered by insurance, a simplified invoice is generated for customer. and tax invoice is generated for insurance.
E.g. The invoice is of 100 SAR, such that,
**Service **
Price 100 SAR
Company pays 80 SAR
Customer pays 20 SAR
Now the question is that,
when we create simplified invoice for customer, how shall we handle the split of amount at item level.
Either, on the item level we shall reduce the item price to 20?
Or item price will remain 100, and 80 shall be mentioned in allowance?
Similarly, how will we handle the same scenario in the tax invoice of insurance company at item level?
For handling split payments between the customer and the insurance company in a medical services context, where a simplified invoice is generated for the customer and a tax invoice is issued for the insurance company, you should manage the item-level pricing carefully to comply with VAT regulations and ZATCA’s e-invoicing rules. Below is a recommended approach for each invoice type:
1. Simplified Invoice for the Customer:
Item Price: The item price should reflect the full service cost, i.e., 100 SAR.
Allowance: The 80 SAR covered by the insurance company should be shown as a deduction or allowance at the invoice level (or item level, if applicable).
Example Breakdown:
Item Price: 100 SAR
Allowance (Insurance Coverage): 80 SAR (can be shown as a discount or allowance)
Customer Payment (Total Payable): 20 SAR
This ensures that the invoice is clear and transparent, showing the full price of the service while reflecting the reduction provided by the insurance. It is also compliant with VAT reporting, as the full VAT is calculated on the original price (100 SAR), and only the customer’s portion (20 SAR) is payable by them.
2. Tax Invoice for the Insurance Company:
Item Price: The item price on the tax invoice should also reflect the full service cost, i.e., 100 SAR, since the insurance company is paying part of the total service cost.
Payment Split: In this case, the invoice will indicate that the insurance company is responsible for 80 SAR.
Example Breakdown:
Item Price: 100 SAR
Insurance Payment: 80 SAR
VAT Calculation: VAT should be calculated on the full amount (100 SAR), even though the insurance company is paying only 80 SAR.
Key Points for Both Invoices:
VAT Calculation: For both the simplified invoice and the tax invoice, VAT should be applied to the full item price (100 SAR). This ensures proper reporting and compliance with ZATCA regulations.
Transparency: It’s important to maintain transparency in both invoices. The customer’s invoice should clearly show the insurance deduction as an allowance, while the insurance company’s invoice should show the full price of the service and the portion that the insurance company is covering.
By handling it this way, you align with ZATCA’s requirements and ensure accurate reporting for both the customer and the insurance company, reflecting the full service price and the split payment correctly.
As per @Ankit_Tiwari response in the Q/A session following points were noted.
B2C Patient invoice shall be generated for the customer. And B2B Summary invoice for Insurance company by end of month.
Item level calculation: any option that works best considering impact on integrated processes such as inventory and revenue postings. How it is done is up to the taxpayer.
Linking the two medical invoices: Not necessary from tax point of view. you may need it for other business processes such as settlement with insurance company etc.
Need more clarification on 2nd point ( Tax Invoice for the Insurance Company:)
How can we say that insurance payment is 80 SAR in the xml? If possible could you please share a sample tax invoice xml for the insurance company with partial payment.