In phase 2 is it required to report the rebate received from the supplier as a tax invoice to ZATCA?
For example, from supplier ABC Ltd we received a rebate of 1,000 for purchasing more than 100 products as per agreement. Currently, this rebate is accounted as revenue in our accounts and VAT is also computed on this. We are not receiving the amount from supplier but we are reducing 1,150 (including VAT) from the supplier’s payable balance.
Please clarify if we are required to show this as an invoice to ZATCA in phase 2.
@Ankit_Tiwari Also, I wanted to highlight the fact that in the ERP, we are creating a Debit Memo in the Accounts Payable (AP) module. So it is not an AR debit memo against a customer but an AP debit memo against the supplier, so I hope that creating the tax invoice against this AP debit memo in the ERP is in compliance with ZATCA.
@Ankit_Tiwari thank for your reply.
No the supplier is not giving us the credit note, so we are thinking of giving them a tax invoice with line item name as “Rebate Received”. Is this in compliance with ZATCA or should we force the supplier to give us the credit note?
@Mirshad please refer to Article 54(1) of KSA VAT Regulations. It requires Supplier to issue Credit Note for adjustment of VAT charged on previously issues invoices.
@Ankit_Tiwari Based on what I read, I think we better just issue the AP debit note directly to the vendor without any QR (as it is NOT an AR debit note) and wait for the AR Credit Note from the supplier with Phase 1 or Phase 2 QR as per the applicability of the supplier.