Open the VAT rates
Under Setup open Settings and scroll to the VAT card. If it is empty, press Create the tax rates and Books creates the four categories.
How Books treats each category
- Standard (S): VAT is charged at the rate shown, and lands in box 1 for sales and box 7 for purchases.
- Zero-rated (Z): no VAT on the line, and the amount shows in box 3 for sales and box 10 for purchases.
- Exempt (E): no VAT on the line, and the amount shows in box 5 for sales and box 11 for purchases.
- Out of scope (O): no VAT on the line, and the amount appears on the return for information only, with no box number.
Books applies the category you choose and does not decide it for you. Which one fits what you buy or sell depends on the regulations, so ask your accountant or adviser if you are not sure.
Set the default rate
The Default column sets the rate new invoice lines start with. Clearing Active hides a rate from the lists, and the default rate cannot be turned off.
Each item has a Sales tax and a Purchase tax on its record, applied when you pick it on an invoice. You can change the rate on any line from the Tax column before issuing.
Add a new rate
Below the table, enter the Name and Rate, choose the ZATCA category, and press Add a rate. This card does not let you edit or delete a rate once added: if you no longer need it, clear Active and add another.
Every zero-rated, exempt or out-of-scope line goes to ZATCA with an exemption reason, and this card neither shows that reason nor lets you pick it. Books applies the default: export of goods for zero-rated, financial services for exempt, and out of scope for the last category. Exports have their own box 4 on the return, which cannot be set from here. If your activity needs something else, such as residential rent, medicines or exports, contact support before issuing invoices.
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