VAT on invoices: the basics, and how Qaid handles VAT and Zakat
What a VAT invoice must show, how the maths works, what Zakat is (and why it isn't an invoice line), and exactly what Qaid does and doesn't do.
The short answer
A VAT invoice shows the net amount, the VAT rate and amount, and the total, plus the seller's VAT registration details; VAT collected on sales minus VAT paid on purchases is what you remit. Qaid applies your company's VAT rate to invoices and expenses and reports the totals; Zakat is a company-level levy that Qaid estimates separately. Qaid does not file returns and is not a ZATCA e-invoicing solution.
What a VAT invoice needs
- Your business name and VAT registration number; the customer's details.
- A sequential invoice number and the issue date.
- Each line's net amount, the VAT rate applied, the VAT amount, and the grand total.
- Currency, and the due date if you offer terms.
Exact requirements depend on the country. In Saudi Arabia, VAT is 15% and VAT-registered businesses must also issue electronic invoices through ZATCA's FATOORA programme, rolled out in phases. Kuwait has no VAT, so Kuwaiti invoices carry none.
The maths
Net 1,000 SAR × 15% = 150 SAR VAT; total 1,150 SAR. That 150 is output VAT you owe to the authority. VAT you paid on business purchases is input VAT you can generally reclaim. The return is output minus input for the period.
Where invoices usually go wrong
- Applying VAT to the wrong base (after a discount is correct; before it is not).
- Totals that don't match once VAT is added.
- Invoice amounts that never make it into the books, so revenue, receivables and VAT owed disagree.
What Zakat is — and isn't
Zakat is a levy on Saudi- and GCC-owned businesses administered by ZATCA, generally 2.5% of the Zakat base, assessed at company level for the year. It is not a line on an invoice. Qaid reports a Zakat estimate (2.5% of the higher of net worth or net profit) as a planning figure; the statutory base includes adjustments a Zakat adviser will make.
What Qaid does
- Applies your company's VAT rate (defaults by country, e.g. Saudi Arabia 15%) to invoice lines after discount, and records output VAT as a liability when the invoice is issued.
- Records input VAT on expenses and supplier invoices you upload.
- Produces a VAT summary (output − input) and a VAT detail report per period.
- Renders a PDF invoice with your VAT number, sequential numbering and a shareable link.
What Qaid does not do
- It does not submit VAT or Zakat returns to ZATCA or any authority.
- It is not a ZATCA-certified e-invoicing solution. Businesses within an integration phase should issue compliant e-invoices from an approved solution and keep their books in Qaid.
- It does not give tax advice. Confirm registration thresholds, exemptions and zero-rating with your adviser.
See invoicing for the feature and Saudi Arabia for the regional specifics.
Sources
This article is general information, not accounting, tax or legal advice. Rules differ by country and change over time; confirm your obligations with a licensed adviser or the relevant authority. Qaid assists with bookkeeping and does not file returns.