Tackling Tax Compliance with TallyPrime

Priyanka Babu | Updated on: November 11, 2024

Tax compliance is critical for businesses to continue as a legal entity in the Kingdom of Saudi Arabia. Accounting software like TallyPrime can help you with a range of tasks when it comes to taxation compliance. TallyPrime can handle compliance needs of KSA businesses from generation of e-Invoices to VAT returns. In this article we will talk about solving tax compliance problems with TallyPrime for businesses in KSA.

Tax compliance in KSA

Tax compliance in KSA revolves around two major regulations:

• VAT or Value Added Tax: Tax levied on the purchase of goods and services by the customers.
• e-Invoicing: Generation of online invoices by integrating your accounting software with the Fatoora portal

How does TallyPrime help with taxation compliance?

TallyPrime helps users with two aspects of tax compliance: VAT filing and generating e-invoices on the Fatoora portal. Let us have a look at how TallyPrime helps businesses with these two compliance measures:

VAT

TallyPrime can automatically generate a VAT return based on all the transactions you have entered for a taxable year. To verify that the VAT return reflects the right data, the software can also produce a VAT return report. The VAT return report will indicate the amount of tax liability, input credit, tax adjustments and VAT payable or refundable.

You can view the assessable value of sales and purchases, and the tax applicable. The software can also provide drill-down reports. These reports indicate transactions for local supplies, GCC supplies, outside GCC supplies, local purchases, GCC purchases, outside GCC purchases, and VAT adjustments up to the transaction level.

How Tally helps:

• Generate VAT complaint invoice
• Handle VAT transactions for a range of business scenarios
• Error detection and correction for accurate VAT returns
• Manage invoices using the e-Invoicing feature
• Bilingual tax and POS invoice (Arabic and English)

e-Invoicing

e-Invoicing refers to the process of generating invoices electronically through a computer. KSA has ruled that handwritten or scanned invoices will not be considered as electronic invoices. With TallyPrime you can generate invoices for all the applicable vouchers you have recorded in the software.

The software gives you the flexibility to generate e-Invoices as soon as a voucher is created or later, as per your business requirement. You can also generate e-Invoices for multiple vouchers at the same time. Once you generate a sales invoice, with the simple click of a button you can generate an e-Invoice. You can generate sales invoices and e-Invoices in both Arabic and English.

Additionally, TallyPrime provides you with a report named e-Invoice Archives. The e-invoicing software allows you to configure a folder path that will automatically save all the e-Invoices generated in a folder of your choice. This will provide easier access to your e-Invoices to ZATCA.

How Tally helps:

• Enable e-invoice generation with a one-time setup
• Create two types of invoices, simplified and standard invoice for B2C and B2B transactions
• Archive e-invoices
• Enable e-Invoice for credit and debit notes
• Print and issue bilingual invoices

Once you have your VAT returns and e-Invoices in place, you can easily compute your tax liability. You can use VAT return reports and e-Invoice reports generated by TallyPrime to compute your taxable income. These reports categorize income and expense groups, giving you a clear picture of exempt income and deductible expenses.

Solving tax compliance with TallyPrime is easier than manually keeping track of all the compliance aspects. Once you have a license to TallyPrime your entire accounting process will be automated with financial records accessible to you with the click of a button. This allows your accounting team to prepare income tax returns without any difficulties.