@Firas in scenario 1, taxable amount also must be rounded to 2 decimals which implies it would be 0.00, then system should not give you any errors. Could you please share the error codes for both scenarios?
For scenario 1, if the taxpayer rounds the taxable amount for 2 decimals to be zero, they will have differences between the exact business transaction value in the source system, VAT return and submitted e-invoices values.
For scenario 2, the VAT is not 15% of the taxable amount as it is showing zero amount whereas the taxable amount is SAR 0.03.
@Firas please note that the fields “Item Net Price (BT-146)” and "Invoiced Quantity (BT-129) do not have any decimal place restrictions. You can include the values in these two fields exactly as per source system without rounding these to 2 decimal places.
Remaining fields have to be rounded to 2 decimal places as per XML Implementation Standard.
This is being rejected from the internal environment following the XML standard.
Please provide me with the field name for the VAT amount (15% * 0.0023) while using “Item Net Price (BT-146)” and “Invoiced Quantity (BT-129)”.
The issue arises when the price is inclusive of tax, then we need to get the net price and then find the LineExtensionAmount by multiplying the quantity by the net price and rounding the result to two digits. Then we find the tax by multiplying it by the tax rate divided by 100.
Here’s an example:
I have 3 products in the invoice, the price including tax is 50 SAR and the quantity is 3 for each product.
Then the net product price will be 43.4782608696
LineExtensionAmount =130.43
TaxAmount =19.56
RoundingAmount =49.99
Now:
TaxableAmount =391.29
TaxAmount =58.69
Now in the qrcode data the total bill will be 449.98
while in the system the total bill is 450 SAR.
We are facing daily issues from our customers because of these discrepancies, as customers believe that our system is faulty and cannot be convinced otherwise.
How can we solve this issue that is constantly troubling us, the solution seems to be to not round the LineExtensionAmount, can you please modify the rules.
Please calculate the line item VAT on unrounded line extension amount, then round the line extension amount and line item VAT amounts after calculations. In your example above, please consider applying following steps:
Item net price = 43.4782608696
Invoiced Quantity = 3
Line Extension Amount (intermediary step to calculate VAT) unrounded = 1 * 2 = 130.4348
Line VAT amount (intermediary step) = 15% of 3 above = 19.56522
now apply 2 decimal place rounding on line extension and VAT amounts which gives 130.43 and 19.57.
Line Amount incl VAT = 150.00
You can perform intermediary calculations on unrounded values, then later round the output to 2 decimal places as explained above.
The tax value will remain the same as well as the taxable amount and this will be reflected in the total invoice, which will be disputed between the XML, QR code and system version.
Case 2:
If we calculate :
Sum of Invoice line net amount (BT-106) = ÎŁ Invoice line net amount (BT-131)
without rounding and just round the resultز
assuming that the entire invoice is subject to the standard rate:
Invoice total amount without VAT (BT-109) = ÎŁ Invoice line net amount (BT-131) - Sum of allowances on document level (BT-107) + Sum of charges on document level (BT-108).
In this case everything is fine, but we will get 3 warnings:
[BR-S-08]:In a VAT breakdown (BG-23) where the VAT category code (BT-118) is “Standard rated” the VAT category taxable amount (BT-116) shall equal the sum of Invoice line net amounts (BT-131) minus the sum of Document level allowance amounts (BT-92) plus the sum of Document level charge amounts (BT-99) where the VAT category codes (BT-151, BT-95, BT-102) are “Standard Rate”.
[BR-CO-10]:Sum of Invoice line net amount (BT-106) = ÎŁ Invoice line net amount (BT-131).BR-CO-10Business rules - conditions (BR-CO).
[BR-CO-13]:Invoice total amount without VAT (BT-109) = ÎŁ Invoice line net amount (BT-131) - Sum of allowances on document level (BT-107) + Sum of charges on document level (BT-108).BR-CO-13Business rules - conditions (BR-CO)".
Third case:
Do not change the calculation logic and handle the difference between the tax in the system and the tax in the xml by adding
allowance or charge on document level.
I gratefully appreciate the level of support you provide to us in this community.
@mnuaimi instead of allowance or charge at document level you can also consider adjusting the halala differences using the tag BT-114 <cac:LegalMonetaryTotal/cbc:PayableRoundingAmount >
item description (is this hypothetical scenario as unit price is just 0.0023) = Commission Fees (banking sector); huge volume of actual business transactions on monthly basis.
How would customer pay such miniscule amount? They are entities which usually they can pay in any way that tackle the tiny amount such as bank transfer or accumulate the balance for a couple of invoices all at once.
@Firas as the unit price is 0.0023, rounded line extension amount will be 0.00 and line level VAT amount will also be 0.00. Financial sector is allowed to issue Summary Invoices for both B2B and B2C transactions wherein you can issue one summary invoice for all transactions with one customer in one calendar month. You may explore alternatives such as grouping similar transactions during the month, particularly the ones with small amounts together, if possible.
If my understanding is correct, please note the below:
The taxable amount is 0.001, and we do accumulate 10 transactions during the month. The taxable amount will be (0.001*10=0.01). VAT amount will be (15%0.01=0.00) after rounding. It will be rejected by ZATCA.
Another scenario, 4 transactions occurred in a month, the taxable amount is (0.001*4=0.004). VAT amount will be (15%*0.004=0.0006). The same will be rejected by ZATCA.
Appreciate your advice as this affects the client’s compliance situation.