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VAT exemption and zero-rate reason codes

The reason codes a zero rated, exempt or out of scope tax rule can carry, ZATCA's official VATEX list and the other countries' reasons.

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A tax rule that is not standard rated (zero rated, exempt or out of scope) carries a reason. The reason is printed under the line and in the Tax breakdown of the invoice. In Saudi Arabia it must be one of ZATCA's official codes, or the e-invoice fails (BR-KSA-CL-04).

You choose the reason in Settings → Taxes when you add or edit a rule: Reason offers the codes of the rule's country and category (ZATCA’s official list (required on e-invoices) in Saudi Arabia). Picking a code fills Reason printed (English) and Reason printed (Arabic) with the official wording; you can change the printed words.

Saudi Arabia (ZATCA)

Code Category Reason
VATEX-SA-29 Exempt Financial services mentioned in Article 29 of the VAT Regulations
VATEX-SA-29-7 Exempt Life insurance services mentioned in Article 29 of the VAT Regulations
VATEX-SA-30 Exempt Real estate transactions mentioned in Article 30 of the VAT Regulations
VATEX-SA-32 Zero rated Export of goods
VATEX-SA-33 Zero rated Export of services
VATEX-SA-34-1 Zero rated The international transport of goods
VATEX-SA-34-2 Zero rated International transport of passengers
VATEX-SA-34-3 Zero rated Services directly connected and incidental to a supply of international passenger transport
VATEX-SA-34-4 Zero rated Supply of a qualifying means of transport
VATEX-SA-34-5 Zero rated Any services relating to goods or passenger transportation, as defined in article twenty five of the Regulations
VATEX-SA-35 Zero rated Medicines and medical equipment
VATEX-SA-36 Zero rated Qualifying metals
VATEX-SA-EDU Zero rated Private education to citizen
VATEX-SA-HEA Zero rated Private healthcare to citizen
VATEX-SA-MLTRY Zero rated Supply of qualified military goods
VATEX-SA-OOS Out of scope Free text: you write the reason case by case
  • New Saudi agencies start with two such rules: Zero rated, international transport (VATEX-SA-34-2) and Outside the scope of VAT (VATEX-SA-OOS).
  • With VATEX-SA-OOS the screen reminds you: For VATEX-SA-OOS write the reason in your own words.
  • VATEX-SA-EDU and VATEX-SA-HEA also need the buyer's name and national id on the invoice (BR-KSA-25, BR-KSA-49).
  • A code from the wrong category is refused (BR-KSA-23 exempt, BR-KSA-69 zero rated, BR-KSA-24 out of scope).

Other countries

Bahrain, the UAE, Oman, Jordan and Egypt have no official code list. The system offers these reasons, with the country code in front (for example BH-Z-INTL-PAX in Bahrain). They are printed as text only.

Code (… = country) Category Reason
…-Z-INTL-PAX Zero rated International transport of passengers
…-Z-INTL-SRV Zero rated Services connected with international transport
…-Z-EXPORT Zero rated Services used outside the country
…-E-FIN Exempt Exempt financial services
…-O-OOS Out of scope Outside the scope of VAT

Qatar, Kuwait and countries not in the list have no reasons to choose from: write your own under Reason printed (English) and Reason printed (Arabic), or leave the default "Not subject to tax".

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