How VAT is worked out, and the Rounding line

Your prices normally include VAT, so the customer pays exactly the price you quoted and the system works the VAT out of it. Because VAT is rounded to the smallest coin of the currency, the amount before VAT plus the VAT can land one unit away from your price. The invoice then shows a Rounding line so that the Amount due stays your price.

Which tax rule a line gets

Each line of the booking gets a tax rule, the first one found in this order:

1. the rule chosen on the line itself;
2. the trip's rule;
3. the branch's rule;
4. the default rule of the branch's country;
5. the agency's default rule, only when the agency has no rules at all for that country;
6. otherwise no tax (out of scope, 0%), printed as "Not subject to tax".

Rules are kept in Settings → Taxes. A switched-off rule is skipped.

Prices with tax and prices without tax

• Prices include tax (the default for every country): the price is the total. The system works out the amount before VAT and the VAT from it, and the customer owes the price as quoted.
• Without it, the price is before VAT and the VAT is added on top.

How the numbers are worked out

The system works in the currency's smallest unit (halalas, fils) and rounds half up, as ZATCA asks:

1. For each tax category and rate, the amount before VAT is the priced total divided by (1 + rate), rounded once.
2. The VAT of that category is that amount times the rate, rounded once. This is the Tax breakdown on the print.
3. Each line also shows its own VAT (its own amount times the rate, rounded). Added up, the lines' VAT can differ from the Total VAT by one unit. The breakdown is the one that counts.

Why there is a Rounding line

Take one line at SAR 1,000.00, VAT 15% included:

Rounding twice made the parts one halala more than the price. The Rounding line takes it back, so the customer pays SAR 1,000.00 as quoted. When the parts add up exactly, the print shows only Total including VAT.

The rounding is at most one smallest unit for each tax category on the document. In Saudi Arabia it is sent to ZATCA as the invoice's rounding amount, which ZATCA accepts.

Currencies with 3 decimals

BHD, KWD and OMR have 3 decimals, so amounts and VAT are rounded to the fils (0.001). Branches in Saudi Arabia must invoice in a currency with 2 decimals such as SAR: E-invoices need a currency with 2 decimals; this booking is in ….

Discounts and other currencies

• A discount on the booking is shared over the lines before VAT is worked out. The print then shows Total before discount and Discount.
• When the invoice is in another currency than your main currency, the print adds Equivalent in your main currency, with the rate and the VAT.

Zero rated, exempt and out of scope lines

These lines carry 0% and the reason from the tax rule, printed under the line and in the Tax breakdown. See Tax categories and VAT exemption and zero-rate reason codes.