How to reclaim tax on your purchase receipts

This article is directed to establishments registered in VAT within the Kingdom. It explains the conditions for VAT refund on purchase invoices, the importance of recording your purchases and expenses in Rewaa to automatically calculate the credit balance, in addition to the method of submitting a refund request via the Zakat, Tax and Customs Authority portal.

⚠️ Note: It is always recommended to refer to the official sources of the authority to ensure the latest updates.

#Conditions for VAT refund on purchase invoices

1. Purchases must be subject to tax (including zero-rated).

2. Documentation must be available that shows the tax paid (e.g., a tax invoice meeting the requirements).

3. The refund claim must be submitted within a time frame not exceeding five years from the end of the calendar year in which the purchases were supplied.

ℹ️ In the presence of (taxable and exempt supplies at the same time): a percentage allocation must be applied to divide input tax between what is related to taxable and exempt supplies.

ℹ️ The executive regulations prevent the deduction of input tax on some expenses outside the scope of activity, such as: entertainment/sports/cultural services and hotel and hospitality services (unless for direct resale). Restrictions and percentages also apply to vehicles used for personal purposes and employee benefits expenses, among others. It is recommended to refer to the updated version of the regulations on the authority's website for more details.

#How does the Rewaa platform help you in requesting a refund?

• It allows you to easily record all purchase invoices and expenses.

• It automatically collects output and input tax data from registered operations in the tax return report.

• It shows you if you have a credit balance eligible for a refund.

#Submitting a refund claim

#1. Extract tax return data from the Rewaa platform

1. Go to Reports > Taxes > Tax Return.

2. Review the tax summary (outputs – inputs – net tax).

3. If you have a credit balance, it will appear in green in the net tax for the specified period.

4. Copy the credit balance from the report to add it to the Zakat, Tax and Customs Authority form when requesting a refund.

#2. Submit an electronic refund request from the authority's portal

• Log in to the authority's portal.

• Go to Indirect Taxes > VAT > VAT Refund Request.

• Create a new request, and ensure the IBAN is linked to the main record.

• Enter the refund information (reference number, period, refund amount).

• Submit the request, you will be notified of the receipt of the request.

⏳ Procedural duration: Refund requests are completed within a maximum of 30 days (may vary depending on examination and existing obligations).

ℹ️ Your claim may be rejected or postponed if you have outstanding returns not submitted or existing obligations with the authority. Review the controls of Article (70) and beyond related to correction and review procedures.

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#Frequently Asked Questions

1. Can I deduct tax on old invoices that I forgot to claim?
   Yes, you can claim them at a later period within the five-year limit from the end of the year in which the supply occurred, provided that the other conditions are met.

2. What should I do if we have mixed expenses (taxable/exempt)?
   An allocation percentage is applied according to a hypothetical method outlined in the regulations; reviewed annually.

3. What documents do I need when submitting the request?
   Correct tax invoices, import documents, and any other evidence accepted by the authority, with compliance with the statutory record-keeping.

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#Approved Official References

1. Input Tax Deduction Guide (ZATCA): Practical Examples and Conditions for Exercising the Right to Deduct | Arabic - English

2. "VAT Refund Request" Service | Arabic - English

#Related Articles

🔗 How to Export a Purchase Invoice from the Rewaa Platform.

🔗 How to Add Your Expenses on the Rewaa Platform.

🔗 How to Use the Tax Return Report in the Rewaa Platform.