Input VAT
In one sentenceThe VAT a business pays on its taxable purchases and expenses, which it may deduct from output VAT subject to conditions.
Simply put
When you buy goods or a service for your business and pay VAT on it, that VAT is recorded in the input VAT account instead of being added to the purchase cost.
It usually requires a valid tax invoice in your business's name, and the purchase must be for a taxable activity.
Worked example
A pharmacy bought taxable tools and supplies worth 40,000 SAR before VAT.
Purchases before VAT40,000 SAR
VAT paid 15%40,000 × 15% = 6,000 SAR
Deductible input VAT6,000 SAR
Formula: Input VAT = taxable purchases before VAT × 15%
Don't confuse it with
Output VATOutput VAT is on your sales and you pay it to ZATCA; input VAT is on your purchases and you deduct it from output VAT.
in FullScreen ERP
The purchasing module calculates deductible VAT on every purchase. Purchasing and suppliers