Output VAT
In one sentenceThe VAT a business charges on its taxable sales and collects from customers on behalf of the Zakat, Tax and Customs Authority (ZATCA).
Simply put
Every taxable sales invoice generates a VAT amount that goes into the output VAT account. It is a liability of the business, not its revenue.
At the end of the tax period, input VAT is subtracted from it, and the difference is what you pay to ZATCA.
Worked example
A restaurant made sales of 50,000 SAR before VAT during the month.
Sales before VAT50,000 SAR
Rate15%
Calculation50,000 × 15%
Output VAT due7,500 SAR
Formula: Output VAT = taxable sales before VAT × 15%
Don't confuse it with
Input VATInput VAT is what you pay on your purchases; output VAT is what you collect from your customers.