VAT Calculation on Excise Goods (100% or 50% VAT Rate)

XML and business rules
1

As per ZATCA Excise Tax Implementing Regulations (Chapter 2, Article 2 & 3), the VAT rate on excise goods is either 100% or 50% (depending upon the product).

For an excise product e.g. tobacco, on line item we want to apply 100% VAT Rate. Currently, on simulation portal, Standard rate does not permit to apply any other VAT rate than 5% or 15%. (BR-KSA-84)

How to apply 100% VAT Rate on line item?

Also, on a single item we want to apply two taxes, i.e.

  1. Standard Rate: 15%
  2. Excise Rate: 100%

Does ZATCA allow multiple taxes on single item?

I could not find this new rule BR-KSA-84 in published version 1.2 of XML implementation document. Kindly share draft version of the newer version.

Details::

  • category : BR_KSA_ERROR
  • **code :**BR-KSA-84
  • message : The Document level allowance VAT rate (BT-96), Document level Charge VAT rate (BT-103), VAT category rate(BT-119), Invoiced item VAT rate (BT-152), Prepayment VAT rate(KSA-34) must be limited to one of the following values (5 or 15) when the relevant Document level allowance VAT category code (BT-95), Document level Charge VAT category code(BT-102), VAT category code(BT-118), Invoiced item VAT category code(BT-151), Prepayment VAT Category Code (KSA-33) is “S“- “Standard rated”. In other words, for Standard Rate VAT Category the rate can either be 15% or 5%.
2

I am facing the same issue, did you find a solution?

3

Dear @BadrAlyafeai , @maryam ,
How fix it?

4

@maryam please note Excise Tax Regulations do not require issuance of Tax Invoice. Also, there is no requirement under VAT Regulations to display Excise Tax separately on VAT Tax Invoice.

You cannot treat Excise as 100% VAT. System will not allow you to use 100% as VAT rate as that is incorrect.

As per Article 26(3) of GCC VAT Framework Agreement, the “value” of supply of goods and services is inclusive of Excise Tax.

You have to provide unit price (BT-146) inclusive of Excise Tax.

For business reasons if you still have to split the basic value and excise tax amount, then you may explore the option of providing excise tax amount as “AllowanceCharge” with indicator “true” at line level.

1 Like
5

Dear @BadrAlyafeai @Madleen

We can include the second tax amount in Item Price.

@Ankit_Tiwari kindly provide your input on this.

6

@maryam as mentioned in previous response, you have to include Excise Tax amount within Unit Price (BT-146).

However, for business reasons, if you still have to split the basic value and excise tax amount, then you may explore the option of providing excise tax amount as “AllowanceCharge” with indicator “true” at line level.

1 Like