Hi dears,
In Saudi Arabia the VAT calculation is subjected to some adjustment based on the tax free income during last year.
If we can add this option to the VAT report it will be very helpful.
in excel, we do it manually as shown below
Yes for sure, but put in mind that income from treasury deposit has no invoice, only the booking documents.
There are exclusions from the VAT deduction for exempt revenues and exempted goods, including returns on financial deposits and Murabaha. The rule for Murabaha returns is that the percentage of the total tax-exempt returns is calculated as a percentage of the company’s total returns during the year, and this percentage is deducted from the amounts required to be deducted from the tax.
Please also use English, consider using an online translator. Arabic may be easier for you but the forum is English language only. I did not comment earlier because you were discussing with @Ealfardan, and I thought that he would already have pointed that out to you.
Now you can use the tax codes Adjustment - VAT 5% and Adjustment - VAT 15% to record apportionment as well as record Debit Notes and Credit Notes relating to invoices issued in a previous VAT period – as required by the VAT regulations.
However, I noticed that the Arabic version is different from the English version.
In the guidelines, ZATCA shows a form similar to the Arabic form, however, I do think that this is due to the guidelines being out of date.
@mam970 could you please share screenshots of the English and Arabic VAT return forms from ZATCA portal so I can make the report fit the forms exactly?
@Ealfardan
appreciate your valuable effort.
only one request, can we make the adjustment to be added manually similar to depreciation.
because its calculation is a little bit complicated, as it required some historical data.
Here is an example for this issue:
last year 2023 the company sales eligible for VAT was 1,000,000
during that year there were some income exempted from VAT of 20,000 (like Murabaha)
the total revenue is 1,020,000
based on that the proportion adjustment to be deducted from the total net purchases for each report will be:
= 20,000 / 1,020,000 = 1.96%
in 2024 first quarter the company purchases was 250,000 it’s VAT to be deducted should be 37,500
but based on the proportion the adjustment for purchases will be (250,000 - (250,000*0.196))
= (250,000 - 49,000) = 201,000
so its VAT to be offset is = 201,000 * 15% = 30,150 instead of 37,500
I meant the adjusted figure to be manually added in this screen
and the calculation for VAT on purchase in the form to be =
( Standard rated domestic purchases - adjusted figure ) * 0.15
it will not affect any part of the financial, the difference will be offset as VAT expenses.
in my example the 7,350 will be closed in the expenses account by journal entry.
Unfortunately, that’s not possible. However, regardless of the method of calculation, you will have to enter a transaction in Manager to increase your tax liability otherwise you will show a false tax asset on your books.
I found that the adjustment column is not available anymore in the 24.9.16.1852 version of Manager.
I think the localization section in updated version didn’t cover this part.
is there a code or something to be added?
The localization server still reflects the changes, however, Idk whether the localization server is relevant at this point. I can’t provide answers at this point so I will have to defer this to @lubos
