Aqid ERPAdding VAT to a price
Multiply the net price by 0.15 to get the VAT, and add it to the price for the total the customer pays.
| Net price | SAR 1,000.00 |
|---|---|
| VAT at 15% (1,000 × 0.15) | SAR 150.00 |
| Total including VAT | SAR 1,150.00 |
Taking VAT out of a VAT-inclusive total
When a price already includes VAT, the VAT inside it is 15/115 of the total, not 15% of it. Divide the total by 1.15 for the net amount; the difference is the VAT.
Taking 15% of the inclusive total is the most common mistake: on SAR 1,150 it gives SAR 172.50 instead of SAR 150.00.
| Total including VAT | SAR 1,150.00 |
|---|---|
| Net (1,150 ÷ 1.15) | SAR 1,000.00 |
| VAT inside (1,150 × 15 ÷ 115) | SAR 150.00 |
Zero-rated and exempt supplies
Not every sale carries 15%. A zero-rated supply is taxable at 0%: you charge no VAT but can still recover the VAT on the costs behind it. An exempt supply is outside VAT: no VAT is charged, and the VAT on its costs generally cannot be recovered.
- Zero-rated, for example: exports of goods and services outside the GCC, international transport, qualifying medicines and medical equipment, investment-grade metals.
- Exempt, for example: residential rent, and certain financial services such as lending margins and life insurance.
Who has to register
Registration is mandatory once taxable supplies over the last 12 months, or expected in the next 12, exceed SAR 375,000. A business may register voluntarily from SAR 187,500. Once registered, every tax invoice must show the VAT and your VAT number, and the VAT collected is paid to ZATCA with each return.
Rounding
Work VAT out per invoice line or on the invoice total, consistently, and round to the halala (two decimals). Aqid ERP calculates per line and shows the total VAT on the invoice, so the invoice, the ledger and the VAT return agree to the halala.