What is Debit Note?
A debit note is a commercial document issued by a buyer to a seller (or by a seller to a buyer in some jurisdictions) to formally request a debit to the seller’s account, typically because of goods returned, billing errors, additional charges, or price adjustments. Under ZATCA’s VAT rules, debit notes are structured documents that adjust the original tax invoice.
How It Works
- Identify the original tax invoice being adjusted.
- State the reason (additional charge, price increase, missing item).
- Include the buyer and seller details, debit amount, and VAT impact.
- Reference the related tax invoice number and date.
- Reflect the adjustment in both parties’ accounts and VAT returns.
Saudi Context
ZATCA’s e-invoicing Phase 2 requires debit and credit notes to be issued in the prescribed XML/PDF-A3 format with cryptographic stamping, just like tax invoices. The debit note adjusts the original VAT invoice and feeds directly into the VAT return through the Fatoora platform. Qoyod issues compliant debit notes automatically.
Example
A supplier shipped goods at SAR 50,000 but later discovered a SAR 5,000 freight charge was missed. It issues a debit note for SAR 5,000 plus SAR 750 VAT, referencing the original invoice. The buyer adjusts payable to SAR 55,750 and books the freight as part of inventory cost.