Treatment of Retention Amount

XML and business rules
1

Our client have a scenario where their customer retains some amount of the invoice till the end of the contract and payment is done after the end of the contract…
We need to know if we can send this retention amount in the XML to Zatca or not.

We understand that if this is not available in the XML, we will be sharing the full invoice amount in the XML but in the PDF we will be showing the retention amount separately and reducing the amount payable by the customer.
How do we raise another invoice for the retention amount as VAT is already paid in the original invoice?

1 Like
2

The retention amount should be mentioned on the human readable invoice to reduce the final payable amount. It will not be included in the XML, and it will not reduce the Tax amount. This means that you will collect from the customer a lesser amount but pay the VAT based on the full amount.

At the end of the project you will issue a Commercial Invoice to collect the Retention amount(s), and at that point there is no VAT to be paid (as this has been paid already).