VAT Returns, Tax Period Closing & Statutory Filing Reports

Value Added Tax (VAT) compliance in Saudi Arabia (15%) and the United Arab Emirates (5%) requires accurate segregation of standard-rated supplies, zero-rated exports, exempt sales, and deductible input tax on local purchases and import customs. BIZA compiles official tax return figures automatically from daily operational documents.

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1. Output Tax vs. Input Tax Reconciliation

Tax calculation happens at the point of document creation rather than month-end estimation:

• Output VAT (Sales): Recorded automatically when tax invoices and credit notes are issued to customers.
• Input VAT (Purchases & Expenses): Recorded when supplier bills, import declarations, and expenses are approved with valid tax invoices.
• Net Tax Liability: $$\text{Net VAT Payable / (Refund)} = \text{Total Output VAT} - \text{Total Recoverable Input VAT}$$

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2. ZATCA Official Return Form Layout (Saudi Arabia)

BIZA structures tax summaries to match the exact statutory boxes of the ZATCA VAT Return:

Section A: VAT on Sales (Output Tax)

• Box 1: Standard-rated 15% sales to local customers.
• Box 2: Sales to registered taxpayers in other GCC states.
• Box 3: Zero-rated local supplies (qualifying medical supplies, transport).
• Box 4: Export supplies outside GCC territory.
• Box 5: Exempt supplies (qualifying financial services, residential leases).

Section B: VAT on Purchases (Input Tax)

• Box 7: Standard-rated 15% local purchases.
• Box 8: Imports subject to VAT paid at customs.
• Box 9: Imports subject to VAT under the Reverse Charge Mechanism (RCM).
• Box 10: Zero-rated purchases.
• Box 11: Exempt purchases.

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3. Reverse Charge Mechanism (RCM) for Foreign Services

When purchasing software, consulting, or engineering services from non-resident suppliers outside Saudi Arabia or UAE:

• Automatic Dual Booking: BIZA accounts for VAT under the Reverse Charge Mechanism without supplier tax registration.
• Simultaneous Debit & Credit: Recognizes both Output VAT Liability and Recoverable Input VAT on the same voucher, ensuring full compliance without manual journal workarounds.

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4. Tax Period Locking & Audit File Export

To prevent audit discrepancies after submitting a statutory tax return:

• Lock Tax Period: Close the month or quarter in BIZA. This freezes the tax period and prevents retroactive editing or addition of invoices dated in that period.
• ZATCA Audit File: Export the complete line-by-line transaction register (including invoice hashes, buyer tax IDs, and clearance codes) ready for submission during official tax audits.