What are Credit and Debit Notes?
Credit and debit notes are documents that adjust previously issued invoices. They're essential for handling returns, corrections, and price adjustments.
Credit Notes (إشعار دائن)
Used when you need to reduce the amount owed by the customer:
- Product returns
- Pricing errors (overcharged)
- Discounts applied after invoice
- Cancelled services
Debit Notes (إشعار مدين)
Used when you need to increase the amount owed:
- Undercharged amounts
- Additional services
- Price adjustments upward
ZATCA Requirements
- Must reference the original invoice number
- Must include reason for adjustment
- Must have QR code
- Subject to same Phase 2 requirements as invoices
VAT Treatment
Credit notes reduce your VAT liability for the period. Debit notes increase it. Both must be properly reported to ZATCA.
Best Practices
- Issue credit/debit notes promptly
- Always reference original invoice
- Keep clear documentation of reasons
- Include in your VAT return