Why is TaxCategory required for AllowanceCharge?

XML and business rules
1

Dear ZATCA Community,

I’m working on implementing document-level discounts using <cac:AllowanceCharge>

I noticed in the implementation standard that even for a discount, the XML requires adding a <cac:TaxCategory> with VAT details (e.g., 15%).

My question is:

  • Why is it required?
  • How to determine the VAT amount?
  • What if I have invoice lines with multiple VAT categories?

Example from the documentation:

<cac:AllowanceCharge>
	<cbc:ChargeIndicator>false/true</cbc:ChargeIndicator>
	<cbc:AllowanceChargeReasonCode>95/CG</cbc:AllowanceChargeReasonCode>
	<cbc:AllowanceChargeReason>Discount/Cleaning</cbc:AllowanceChargeReason>
	<cbc:Amount currencyID="SAR">200</cbc:Amount> (1)

	<cac:TaxCategory>
		<cbc:ID>S</cbc:ID>
		<cbc:Percent>15</cbc:Percent>
		<cac:TaxScheme>
			<cbc:ID>VAT</cbc:ID>
		</cac:TaxScheme>
	</cac:TaxCategory>
</cac:AllowanceCharge>

I would appreciate clarification on that
Thank you

2

@noor-cm please note that Document Level Discounts and Line Level Discounts are independent of each other. Ta Category is not needed for line level discount as the discount takes same tax category as applied overall to that particular line item. However, document level discount is an independent tag, it is mandatory to include the tax category so that document level discount can be reflected in corresponding tax category’s “tax sub-total”.

Please look at sample XMLs in SDK to see how document level discounts are to be provided and how the VAT is calculated.

As mentioned above, there is no relationship between line item level discount and document level discount so it doesn’t matter if invoice has line item with multiple VAT categories. You have to include tax category details while providing document level discount.

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3

Thank you for your reply
I need some more clarification please..

Should I ask the user to specify which tax category they want to be applied on the document-level allowance charge?

If the user chooses a 15% tax category for the document-level allowance charge, does that mean the allowance will be applied only to the invoice with 15% tax category, and not to those with 0% tax category?

4

@noor-cm Yes you should ask the user to specify which tax category is applicable for the document level charge. Document level allowance is an independent field, it does not depend on the line item level tax categories.

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