Customer Advanced Payment

In Saudi Arabia will start implementation VAT tax from January 2018 we have urgent special case requested from government

when collect advanced payment from customer must be calculate tax 5 % from this amount , and create JV ,

after add invoice system automatic close tax in advanced payment withe invoice tax . like prepayment in AP .

a. Advances from Customers

In case an advance payment from customers, we will have to issue a VAT invoice for

advance. The calculation will be as follows:

Advance payment received = SR 100,000

VAT Rate = 5%

Amount Incl. of VAT = SR 100,000

Amount of VAT = 100,000*5/105 = 4,761.90

Amount Excl. of VAT = SR 95,238.10

This invoice will have to be adjusted against subsequent standard invoice.