Summary
You can start creating transactions in Zoho POS after you've set up the taxes, contacts, and items. For every transaction of goods and services, the applicable tax rates will be based on these two important factors:
Place of supply
Contact’s tax treatment
Taking these aspects into account, we have identified various case situations based on operating location for both sales and purchase transactions, with varying appropriate tax rates.
Sales transactions
Case: 1
Scenario: Selling goods or services to a VAT-registered customer in the Saudi Arabia.
Tax Treatment: VAT Registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Tax rates defined at the item or service (Standard rate - 15%, Zero Rate, Exempt, or Out of Scope).
Case: 2
Scenario: Selling goods or services to a customer who is in the Saudi Arabia and is not registered for VAT.
Tax Treatment: Non- VAT Registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Tax rates defined at the item or service (Standard rate - 15%, Zero Rate, Exempt, or Out of Scope).
Case: 3
Scenario: Selling goods or services to a customer who is registered for VAT in any one of the GCC member countries other than the Saudi Arabia.
Tax Treatment: GCC VAT Registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Tax rates defined at the item or service (Standard rate - 15%, Zero Rate, Exempt, or Out of Scope).
Case: 4
Scenario: Selling goods or services to a customer who is registered for VAT in any one of the GCC member countries other than the Saudi Arabia.
Tax Treatment: GCC VAT registered
Place of Supply: GCC
Applicable Tax Rates: Zero Rate
Case: 5
Scenario: Selling goods or services to a customer who is in any one of the GCC member countries other than the Saudi Arabia and is not registered for VAT.
Tax Treatment: GCC Non-VAT registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Tax rates defined at the item or service (Standard rate - 15%, Zero Rate, Exempt, or Out of Scope).
Case: 6
Scenario: Selling goods or services to a customer who is in any one of the GCC member countries other than the Saudi Arabia and is not registered for VAT.
Tax Treatment: GCC Non-VAT registered
Place of Supply: GCC
Applicable Tax Rates: Zero Rate
Case: 7
Scenario: Selling goods or services to a customer who is in any one of the GCC member countries other than the Saudi Arabia and is not registered for VAT.
Tax Treatment: Non GCC
Applicable Tax Rates: Zero Rate
Purchases Transactions
Domestic Reverse Charge: This mechanism in the VAT system transfers the responsibility of tax payment from the provider to the buyer. Instead of the supplier charging VAT on the invoice, the buyer of the goods or services must account for and pay the VAT to the tax authorities. This technique is intended to prevent tax fraud, which occurs when corporations collect taxes but do not pay them to the government. In this scenario, you are the buyer, so the charges will be included in your purchase transactions.
Case: 1
Scenario: Buying goods or services from a VAT-registered vendor in the Saudi Arabia.
Tax Treatment: VAT Registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Goods or Services - Standard Rate (5%), Zero Rate, Out of Scope, or Exempt.
Domestic Reverse Charge: Standard Rate (5%) or Zero Rate.
Case: 2
Scenario: Buying goods or services from a vendor who is in the Saudi Arabia and is not registered for VAT.
Tax Treatment: Non VAT Registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Goods or Services - Standard Rate (5%), Zero Rate, Out of Scope or Exempt.
Domestic Reverse Charge: Standard Rate (5%) or Zero Rate.
Case: 3
Scenario: Buying goods or services from a vendor who is registered for VAT in any one of the GCC member countries other than the Saudi Arabia.
Tax Treatment: GCC VAT Registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Goods/Goods and Services Out of Scope, Services - Standard Rate (5%), Zero Rate, or Out of Scope.
Domestic Reverse Charge: Standard Rate (5%) or Zero Rate.
Case: 4
Scenario: Buying goods or services from a vendor who is registered for VAT in any one of the GCC member countries other than the Saudi Arabia.
Tax Treatment: GCC VAT Registered
Place of Supply: GCC
Applicable Tax Rates: Goods or Services- Exempt or Out of Scope
Domestic Reverse Charge: Standard Rate (5%) or Zero Rate.
Case: 5
Scenario: Buying goods or services from a vendor who is in any one of the GCC member countries other than the Saudi Arabia and is not registered for VAT in that particular country.
Tax Treatment: GCC Non-VAT registered
Place of Supply: Saudi Arabia
Applicable Tax Rates: Goods/Goods and Services - Out of Scope; Services - Exempt or Reverse Charge along with 5% or 0%.
Domestic Reverse Charge: Standard Rate (5%) or Zero Rate.
Case: 6
Scenario: Buying goods or services from a vendor who is in any one of the GCC member countries other than the Saudi Arabia and is not registered for VAT in that particular country.
Tax Treatment: GCC Non-VAT registered
Place of Supply: GCC
Applicable Tax Rates: Goods or Services - Out of Scope
Domestic Reverse Charge: Standard Rate (5%) or Zero Rate.
Case: 7
Scenario: Buying goods or services from a vendor who is outside any of the GCC member countries.
Tax Treatment: Non GCC
Applicable Tax Rates: Goods/Goods and Services - Out of Scope; Services - Exempt or Reverse Charge along with 5% or 0%.
Domestic Reverse Charge: Standard Rate (5%) or Zero Rate.