Saudi Standard Rated Purchases & Adjustment Calculation
Introduction:
This tutorial will help the Saudi users of TopNotepad understand how the software calculates standard rated purchases and adjustment that appear in the VAT form.
Let us first look at the standard rated purchases calculation:
Domestic purchases at standard rated VAT across all the bills in a given VAT period are considered for calculating total standard rated purchases. Also, any refund or credit note received from the vendor/seller during the period for a bill raised during the same period is netted off to arrive at final standard rated purchases.
The list of all bills along with the value of goods/services purchased at standard rated VAT from those bills that are considered for calculating standard rated purchases can be found by clicking on the “plus” icon.
The negative value represents any refund/credit you received from your vendor/seller against any of the bills that was issued to you by your seller in the same VAT period.
Example:
If the VAT period is 1-Aug-2018 to 31-Aug-2018 then all the standard rated domestic purchases made during this period across all the bills are first summed up. Let’s assume the standard rated purchases were worth SAR 20,000.
Now, during the same period i.e., 1-Aug-2018 to 31-Aug-2018 you get refund and/or credit note against a bill that was also received during the same period, then the final standard rated purchases amount would be net off the purchases and refund/credit note, during the period.
Continuing the above example, let’s say, there was this bill worth SAR 1500 you received on 8-Aug-2018 and on 21-Aug-2018, for some reason you got a refund or a credit note worth SAR 500 then the final standard rated purchases amount would be net off the purchases and refund/credit note, during the period i.e., 19,500 (i.e., 20,000-500)
Please take special note, the refunds/credit notes we consider for netting off the standard rated purchases are only those refunds/credit notes that you receive against bills from the same VAT period. If the bill is of a different VAT period, then such refunds/credit notes are accounted for in the adjustment section.
Next, let’s look at adjustments:
Standard rated adjustment is sum of refund or credit note you received in the current VAT period for purchases that were made in previous VAT period.
Let’s say the current VAT period is 1-Aug-2018 to 31-Aug-2018 and a few bills from a previous VAT period of 1-April-2018 to 30-April-2018 (please note, previous VAT period doesn’t mean the immediate preceding VAT period, it could be earlier than that) got refunded or a credit note was issued to you by your vendor then sum of refund or credit note of such bills is reported in adjustment section of current VAT period.
The list of all bills from previous VAT period against which refund or credit note was issued by your vendor in the current VAT period can be found by clicking on the “plus” icon.
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This tutorial will help the Saudi users of TopNotepad understand how the software calculates standard rated purchases and adjustment that appear in the VAT form.
Let us first look at the standard rated purchases calculation:
Domestic purchases at standard rated VAT across all the bills in a given VAT period are considered for calculating total standard rated purchases. Also, any refund or credit note received from the vendor/seller during the period for a bill raised during the same period is netted off to arrive at final standard rated purchases.
The list of all bills along with the value of goods/services purchased at standard rated VAT from those bills that are considered for calculating standard rated purchases can be found by clicking on the “plus” icon.
The negative value represents any refund/credit you received from your vendor/seller against any of the bills that was issued to you by your seller in the same VAT period.
Example:
If the VAT period is 1-Aug-2018 to 31-Aug-2018 then all the standard rated domestic purchases made during this period across all the bills are first summed up. Let’s assume the standard rated purchases were worth SAR 20,000.
Now, during the same period i.e., 1-Aug-2018 to 31-Aug-2018 you get refund and/or credit note against a bill that was also received during the same period, then the final standard rated purchases amount would be net off the purchases and refund/credit note, during the period.
Continuing the above example, let’s say, there was this bill worth SAR 1500 you received on 8-Aug-2018 and on 21-Aug-2018, for some reason you got a refund or a credit note worth SAR 500 then the final standard rated purchases amount would be net off the purchases and refund/credit note, during the period i.e., 19,500 (i.e., 20,000-500)
Please take special note, the refunds/credit notes we consider for netting off the standard rated purchases are only those refunds/credit notes that you receive against bills from the same VAT period. If the bill is of a different VAT period, then such refunds/credit notes are accounted for in the adjustment section.
Next, let’s look at adjustments:
Standard rated adjustment is sum of refund or credit note you received in the current VAT period for purchases that were made in previous VAT period.
Let’s say the current VAT period is 1-Aug-2018 to 31-Aug-2018 and a few bills from a previous VAT period of 1-April-2018 to 30-April-2018 (please note, previous VAT period doesn’t mean the immediate preceding VAT period, it could be earlier than that) got refunded or a credit note was issued to you by your vendor then sum of refund or credit note of such bills is reported in adjustment section of current VAT period.
The list of all bills from previous VAT period against which refund or credit note was issued by your vendor in the current VAT period can be found by clicking on the “plus” icon.
Go back to the list of all tutorials