ZATCA credit note requirements for refunds and invoice changes
When you refund a customer or reduce an amount after issuing a tax invoice, you need a credit note that references the original invoice and states the reason. The credit note follows the same ZATCA process as the original invoice: reporting for simplified invoices and clearance for standard invoices. You must keep the original invoice unchanged.
These requirements apply to electronic credit notes under ZATCA's Phase 2 integration rules. Source: https://zatca.gov.sa/en/e-invoicing/introduction/guidelines/documents/e-invoicing_detailed__guideline.pdf
When you need a credit note
A credit note records a reduction to an amount that you have already invoiced. ZATCA's detailed e-invoicing guidelines explain that credit notes are used for refunds and corrections to previously issued invoices.
For a WooCommerce store, a credit note is relevant when:
- A customer returns an item and receives a refund.
- You refund part of an order after issuing its invoice.
- You reduce an invoiced amount because of a pricing correction.
- You need to correct an issued invoice by reducing its value.
The key point is that an invoice already exists. The credit note records the adjustment while preserving the original document.
A credit note must identify the original invoice to which it relates. ZATCA's guidelines also allow references to multiple original invoices where the note covers more than one invoice.
The type of credit note follows the type of the original invoice. A simplified tax invoice has an associated simplified credit note. A standard tax invoice has an associated standard credit note.
When you need a debit note instead
Credit notes reduce an invoiced amount. Debit notes increase it.
ZATCA describes debit notes as documents used to correct an invoice when the original invoiced value or VAT amount needs to increase. Both types of note follow the format of the invoice being adjusted.
| Change after invoicing | Document |
|---|---|
| Customer receives a refund | Credit note |
| Invoiced amount decreases | Credit note |
| VAT amount decreases following an adjustment | Credit note |
| Invoiced amount increases | Debit note |
| VAT amount increases following an adjustment | Debit note |
For example, if an already issued invoice contains an amount that needs to be reduced, you record that reduction through a credit note. If the amount needs to increase, the corresponding document is a debit note.
Raseedo generates credit notes for WooCommerce refunds. Raseedo does not issue debit notes. WooCommerce has no debit-note action.
What a ZATCA credit note must contain
A credit note is an electronic tax document with its own identity. It must refer to the original transaction and contain the fields required for its document type.
ZATCA's implementation resolution and detailed guidelines identify the following information.
Original invoice reference
The credit note needs a reference to the invoice being adjusted. This connects the reduction to the original sale.
The invoice reference is separate from the credit note's own document identifier. The credit note must have its own identification within the electronic invoicing records.
For a WooCommerce refund, Raseedo creates a credit note that references the original invoice.
Reason for issuing the note
ZATCA requires a reason for issuing a credit or debit note.
The reason should describe the adjustment. For a refund, this might relate to returned goods or a correction to the invoiced amount.
Raseedo includes the WooCommerce refund reason in the credit note. This keeps the explanation associated with the document sent to ZATCA.
Adjusted amounts and VAT
The credit note must represent the financial adjustment, including the relevant amounts and VAT.
A partial refund concerns the amount being reduced rather than the entire original sale. Your records should allow that adjustment to be identified against the original invoice.
The original invoice remains available as the record of the amount initially invoiced.
Document identifiers and the invoice chain
ZATCA's Phase 2 requirements include identifiers that maintain the sequence of electronic documents.
Two fields matter here:
- Invoice Counter Value (ICV): the counter associated with each generated invoice or note.
- Previous Invoice Hash (PIH): the hash connecting a document to the preceding document in the sequence.
The previous hash refers to the preceding generated document in the chain. It is different from the reference to the original invoice being adjusted.
Raseedo includes both ICV and PIH in signed documents. It creates documents one at a time so that simultaneous WooCommerce checkouts do not interrupt the sequence.
Sources:
Partial refunds require a credit note
You do not have to refund an entire order for a credit note to be needed.
A partial refund reduces the amount previously invoiced. The adjustment must be recorded against the original invoice, with the relevant VAT information.
Consider a WooCommerce order containing several items. The customer returns one item and keeps the others.
The original invoice records the complete sale. The credit note records the reduction associated with the returned item. The remaining sale is still represented by the original invoice and the adjustment.
The same principle applies when you refund only part of an invoiced amount because of a price correction.
There are two records to keep:
- The original electronic invoice, showing the amount initially invoiced.
- The credit note, showing the adjustment and its reason.
Where another adjustment is required later, it must be recorded through the appropriate document rather than by changing the first invoice.
ZATCA's detailed guidelines provide an example of a buyer returning some items from an invoiced purchase. The seller issues a credit note referring to the original invoice.
Credit notes follow the original invoice's ZATCA process
Phase 2 treats simplified and standard documents differently.
| Document type | ZATCA process | Timing |
|---|---|---|
| Simplified tax invoice | Reporting | Within 24 hours of issue |
| Simplified credit note | Reporting | Within 24 hours of issue |
| Standard tax invoice | Clearance | Before providing it to the buyer |
| Standard credit note | Clearance | Before providing it to the buyer |
A simplified credit note is generated and signed by the invoicing system. It is then reported to ZATCA.
A standard credit note follows the clearance process. ZATCA checks the document before it can be provided to the buyer.
These processes apply according to the original invoice type. Your store's invoicing system must therefore distinguish between simplified and standard tax documents.
Do not edit or delete the original invoice
Once an electronic invoice has been issued, you must preserve it.
Changing the original document after a refund would replace the record of what was initially invoiced. Deleting it would remove that record.
ZATCA identifies deleting or amending issued electronic invoices as a violation. Its guidance directs taxpayers to issue an appropriate credit or debit note when an adjustment is needed.
This distinction also matters for electronic document sequencing. Every document has its own counter and hash. Replacing an earlier invoice would interfere with the records connected to it.
Keep the original invoice and the associated adjustment document. Each has a different purpose.
Sources:
- ZATCA, e-invoicing violations and fines
- ZATCA, Detailed Guidelines for E-Invoicing (sections 4.3 and 6.5)
How WooCommerce refunds become credit notes with Raseedo
WooCommerce records refunds against orders. Raseedo connects that refund activity to ZATCA electronic credit notes.
For a store using the free plugin, the process works as follows:
- A paid WooCommerce order receives a simplified electronic tax invoice.
- Raseedo signs the invoice, generates its QR code and reports it to ZATCA in the background.
- When the order is refunded, Raseedo creates a credit note referencing the original invoice.
- The credit note includes the refund reason and follows the required document sequence.
- Raseedo submits the credit note through the ZATCA reporting process.
Raseedo uses WooCommerce Action Scheduler for background submissions. Network problems and ZATCA outages are retried for hours within the reporting window.
If ZATCA rejects a document, the rejection reason appears in the E-invoices tab. Raseedo also adds an order note so the issue is visible in WooCommerce.
Standard credit notes need Pro
The free plugin issues simplified tax invoices and their associated credit notes.
Raseedo Pro adds standard B2B tax invoices. When a buyer enters a valid company VAT number and the required business information at checkout, the order receives a standard invoice submitted for ZATCA clearance.
Refunds against those standard invoices receive standard credit notes. These follow the clearance process rather than simplified reporting.
Older orders need separate attention
An order created before ZATCA onboarding may not have an electronic invoice. The same applies to refunds that occurred before electronic credit note generation was enabled.
Raseedo Pro includes a missing e-invoice report. It identifies paid orders without an electronic invoice and refunds without a credit note.
The report supports issuing missing documents in batches. It does not change the original date of a transaction or remove any requirement that applied when the document was due.
See credit note features for the WooCommerce refund process.
Keep the original and the credit note together
Raseedo stores signed XML documents and ZATCA responses on your WordPress site.
For each refund, you can use the WooCommerce order and its associated electronic documents to review the adjustment. The E-invoices tab shows submission status and rejection information.
Raseedo also retains issued documents when the plugin is uninstalled unless the store owner explicitly chooses to delete everything.
Keep your invoicing records available for review. The original invoice and its credit note describe different parts of the transaction, and both are needed to follow the adjustment.
Sources
- ZATCA, Detailed Guidelines for E-Invoicing, May 2023, sections 2.5, 2.6, 4.3, 6.4 and 6.5
- ZATCA, Controls, Requirements, Technical Specifications and Procedural Rules for Implementing the E-Invoicing Regulation, updated May 2023, Annex 2
- ZATCA, E-invoicing Regulation, Article Four
- ZATCA, E-invoicing Violations and Fines, 16 November 2021
- ZATCA, E-Invoicing Frequently Asked Questions (modifying or cancelling an issued invoice)
Questions
Does ZATCA require a credit note for a partial refund?
Yes. A partial refund that reduces an amount already invoiced needs a credit note linked to the original invoice. The note records the adjustment, including the relevant VAT and the reason for the refund. The original invoice stays unchanged. Raseedo creates credit notes for WooCommerce refunds and includes the original invoice reference.
Do credit notes need to be sent to ZATCA within 24 hours?
Simplified credit notes must be reported to ZATCA within 24 hours of issuance. Standard credit notes follow the clearance process and must be cleared before being provided to the buyer. The document type follows the original invoice. Raseedo's free plugin handles simplified credit notes, while Pro adds standard credit notes.
Can I change an invoice instead of issuing a credit note?
No. ZATCA prohibits editing or deleting electronic invoices after issuance. When an already issued invoice needs a reduction, issue a credit note that references it. Use a debit note when an adjustment increases the invoiced amount. Keep the original invoice and the adjustment document in your records.