Debit note
In one sentenceA document issued by the seller to increase the value of a previous invoice because of a pricing error or a later addition, which raises the corresponding output VAT.
Simply put
When you discover that an invoice was issued below its correct value, you do not issue a new duplicate invoice; instead you issue a debit note that refers to the original invoice with the difference and its VAT.
The VAT on the note is added to output VAT in the period in which it was issued.
Worked example
A factory issued an invoice for 5,000 SAR before VAT, then it turned out the agreed price was 6,000 SAR.
Difference in value6,000 − 5,000 = 1,000 SAR
VAT on the difference 15%1,000 × 15% = 150 SAR
Debit note value including VAT1,150 SAR
Formula: VAT on the note = increase amount × 15%
Don't confuse it with
Credit noteA debit note increases the invoice and its VAT; a credit note reduces them.
in FullScreen ERP
The e-invoicing module issues credit and debit notes for returns and post-sale discounts. E-invoicing