In a major overhaul of its VAT Implementing Regulations, the Zakat, Tax and Customs Authority (ZATCA) has introduced stricter rules governing the issuance of credit and debit notes, aligning them with the timelines required for tax invoices. As per the new amendment, businesses must now issue these documents within 15 days of the triggering event, such as returns, discounts, or contractual changes.
The amendment, introduced under Board Resolution No. 01-06-24, represents one of the most notable changes since VAT was first implemented in Saudi Arabia in 2018.
What Has Changed?
Under the previous regulations, businesses were required to issue credit or debit notes “without undue delay,” which left room for interpretation. The updated Article 54 now states:
“A taxable person must issue a credit or debit note within 15 calendar days of the date on which the event giving rise to the adjustment occurred.”
This rule mirrors the timeline for issuing tax invoices under Article 53 and removes ambiguity around compliance expectations.
️ Triggering Events Defined
ZATCA clarifies that the 15-day period applies to events including:
- Full or partial cancellation of a supply
- Granting of discounts or rebates
- Return of goods
- Correction of an earlier invoicing error
If the taxable value or VAT amount needs to be adjusted, the adjustment must be formalized within the 15-day window through a compliant credit or debit note.
Format and Content Requirements
Credit/debit notes must still include all mandatory elements as per the VAT regulations, such as:
- Reference to the original tax invoice
- Supplier and customer VAT details
- Reason for the adjustment
- Adjusted VAT amount
Failure to meet these criteria, or delays beyond 15 days, can result in administrative penalties under ZATCA’s enforcement framework.
Implications for Businesses
The new rule tightens compliance timelines and demands enhanced coordination between finance, sales, and legal teams. Businesses must:
- Monitor all triggering events closely
- Update ERP systems to flag and automate adjustments within the legal window
- Train staff to ensure adherence to the revised deadlines
The shortened timeline may be particularly challenging for businesses with high transaction volumes or decentralized operations.
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