VAT return checklist for Saudi businesses

Your tax period is quarterly unless your annual taxable supplies exceed SAR 40 million, in which case it is monthly. Most small and mid-size businesses, such as a cafe, a clinic or a trading shop, therefore file four returns a year. The return for a period is due by the end of the month after that period ends, not on the last day of the period itself.

For example, a quarter that ends on 31 March has its return due by the end of April, and a June period for a business on the monthly rhythm is due by the end of July. Put these dates in a calendar with a reminder a week earlier, because filing needs preparation time, and that preparation should not start on the due date.

A VAT return summarises two sides. Output VAT is the VAT you charged on your sales in the period. Input VAT is the VAT you paid on purchases and expenses that you can claim back. The return brings the two together, and the difference is what you settle with ZATCA. When input VAT is larger, ZATCA's rules say how the difference is handled.

Input VAT needs proof. The usual proof is a valid tax invoice from your supplier, so a purchase backed only by a till slip or a handwritten note puts your claim at risk. Sort purchase invoices as they arrive instead of hunting for them on the due date. A cafe and a contractor benefit from the same habit.

Not every document in the period is a plain sale. A credit note you issued for a returned item reduces your sales and output VAT for that period, and a debit note adds to them. Credit and debit notes from suppliers adjust your input VAT the same way. Each must refer to the original invoice and state a reason.

Zero-rated and exempt supplies need separate care. A zero-rated supply, such as an export of goods, is still a reported sale, but the VAT rate on it is 0%. An exempt supply carries no VAT and is treated differently. Pick the right treatment when the invoice is created, because fixing it at return time means reopening many documents. If in doubt, ask your accountant.

Do the work every month, even if you file quarterly. Three small reviews are easier than one large scramble at the end of the quarter. Pick a fixed day after month end, give each task to a named person, and follow the same order each time so that gaps stand out.

The list below is a starting point, so adapt it to your business. A cafe adds a check of till closing totals, a wholesaler compares delivery notes with invoices, and a contractor confirms that every billed stage has an invoice. Keep the list short enough that it really gets done. It is fine to start with three items and add more month by month.

• Confirm all invoices from every till and branch are issued and numbered in sequence
• Check that credit and debit notes refer to their original invoices
• Collect the month's supplier tax invoices and chase missing ones
• Review zero-rated and exempt sales for correct treatment
• Run the VAT reports and compare totals with your records

Before you file, the VAT figures should agree with your books. Compare output VAT in the report with the VAT recorded on your sales, and input VAT with the VAT recorded on purchases. A small difference is a clue, not a conclusion: find the invoice, note or period that explains it, and correct the records before you correct the return.

Most differences come from a short list of causes. Go through the common errors below when totals do not match, and write down what you found. Next month's review will be faster, and your accountant can see how you reached each number. Fix the cause, not only the number, and if the same error comes back every month, change the procedure that causes it.

• An invoice dated in one period but recorded in another
• Input VAT claimed without a valid tax invoice
• A forgotten credit note, leaving sales and VAT too high
• Zero-rated and exempt sales mixed up with standard-rated ones
• A due date nobody put in a calendar

The taxpayer files the return on ZATCA's own portal, and Fatooraz does not file it for you. What software can do is prepare the numbers, so the amounts you enter or confirm on the portal come from records you trust, not from memory. Dates, forms and rules are set by ZATCA and can change, so check its latest announcements before each filing.

Fatooraz helps with that preparation. Its VAT reports show the VAT on your sales and purchases by tax treatment for the period you choose, which you check against the return form. Because invoices, credit notes and purchases are recorded as they happen, month end becomes a review, not a rebuild. Keep records generally six years and confirm your own case with your accountant.