How to invoice a zero-rated or exempt sale

The tax rate on each line decides its VAT. A zero-rated or exempt rate charges none; in Saudi Arabia it also tells ZATCA why, on every e-invoice.

Steps

  1. Pick the rate per line

    In the invoice's Tax column, choose the zero-rated or exempt rate for each line it applies to. Each line is taxed on its own.

  2. Add your own rate

    Choose Settings → Set up → Tax rates → Add tax rate, set its Category to Zero rated or Exempt and its rate to 0.

  3. Name the ZATCA reason

    For a Saudi company the form also asks for the ZATCA reason, chosen from ZATCA's list. It goes on every e-invoice that uses the rate.

  4. Review default reasons

    In Saudi Arabia, Compliance → Exemption reasons to check lists generic rates you use: choose It is right for us, or Use a specific rate.

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