Prerequisites for System Configuration

System Settings Doctype

• Rounding Rules: Ensure rounding is configured for 2 digits after the decimal point.

  • Float Precision: Set the precision value to 2.
  • Currency Precision: Set the precision value to 2.

Accounts Settings

• Round Tax Amount Row-wise: Make sure that this checkbox is enabled, because in some cases it causes some calculation gaps results rejection for the invoice

Currency Doctype

• SAR Currency Configuration: Set the Smallest Currency Fraction Value to 0.01 for the Saudi Riyal (SAR) currency.

Country Doctype

• Country Code: Verify that the code for Saudi Arabia is set to "SA" (capitalized).

Global Defaults

• Rounding: Ensure rounding is disabled globally.

Sales Tax and Charge Template

Tax Categories and Codes: The user must create a tax category with a name of their choice and select the suitable ZATCA category. The system will then set the code and reason based on the selection in the ZATCA category. Add the following tax categories with their associated codes:

Category of Goods/Services: Provide a description or category for goods or services.

• VAT Category Codes:

  • Standard Rate: Use code "S"
  • Zero-Rated Goods: Use code "Z"
  • Exempt from Tax: Use code "E"
  • Services Outside the Scope of VAT or Supplies Not Subject to VAT: Use code "O"

By implementing these prerequisites, the system will ensure compliance with Zakat regulations and correctly handle VAT requirements for Saudi Arabia. Users will be able to create custom tax categories and select appropriate ZATCA categories, with the system automatically setting the corresponding codes and reasons.

Note: The system must have one default Sales taxes and charges template to complete the compliance checks properly