VAT-01 · FlowCount VAT
Reverse-charge VAT on imported services
Every imported service, reverse-charged in the right period.
الاحتساب العكسي على الخدمات المستوردة، دون أي سهو
1.25M
of FY2025 reverse-charge VAT expected on imported services in the sample
Basis: illustrative sample engagement (fictional data)
The problem
Every service bought from a non-resident is also a reverse-charge VAT event: you self-account output VAT at 15% and usually recover it as input VAT. It is often cash-neutral, but omissions draw penalties, and a partially exempt business loses real money. Teams handle WHT and VAT separately, so the same payment is often right for one and wrong for the other. Treaty relief has no effect on VAT.
“Treaty-exempt for WHT is not exempt for VAT.”
What FlowCount does
The same non-resident service population as the WHT review, tested so that RCM output and input VAT were booked in the right period.
- AI and rules used
- Rules; reuses WHT classification
- Builds on
- WHT Health Check classification
How it works
Who does each step
- 01Rules
Reuse the WHT classification
No new data request: the non-resident population is already classified by substance.
- 02Rules
Apply VAT treatment
Standard-rated services at 15% RCM; exempt, zero-rated and out-of-scope lines excluded.
- 03Reviewer
Match to returns
Expected RCM vs declared, by period; differences explained or corrected.
What you send
- WHT-classified population (no new request)
- VAT return workpapers (reverse-charge line by period)
What you receive
- RCM reconciliation by period
- Exposure and correction schedule
Controls built in
- VAT rulebook slice approved separately from the WHT rulebook
- Insurance lines always reviewed manually
KPIs we report
- RCM declared ÷ expected (target 100%)
Sample input → expected output
What the result looks like
Basis: illustrative sample engagement (fictional data)
| WHT category | VAT treatment |
|---|---|
| MGMT, TECH, ROYALTY, OTHER, TELECOM, RENT | Imported service, standard-rated: **RCM 15%** |
| INTEREST | Financial service, generally exempt: no RCM (confirm margin-based) |
| DIVIDEND | Outside the scope of VAT |
| FREIGHT, AIRTICKET (international) | Zero-rated international transport: no RCM |
| INSURANCE | Manual review: depends on the nature of cover |
| GOODS | Import VAT at customs, not RCM |
| Category | Lines | RCM expected |
|---|---|---|
| MGMT | 2 | 450,000.00 |
| ROYALTY | 4 | 238,950.00 |
| TECH | 4 | 216,480.00 |
| OTHER | 2 | 61,200.00 |
| RENT | 1 | 45,150.00 |
| TELECOM | 1 | 8,437.50 |
| Total from AP population | 14 | 1,020,217.50 |
| + JV-2025-0931 management fee (outside AP) | 225,000.00 | |
| Total RCM expected, FY2025 | 1,245,217.50 |
The comparison with your VAT returns is the finding. A typical pattern: management fees carrying a "treaty-exempt" WHT code were also left out of RCM, which puts 450,000 + 225,000 at risk of a non-declaration penalty even if the net VAT is nil.
Portfolio scorecard
Where it sits on the roadmap
Value
3.80 / 5
Feasibility
4.55 / 5
Priority index
8.65 · rank 6 of 27
Quadrant
Quick win
Delivery
Wave 1 (0-3 m)
T-shirt size S: 2 to 4 weeks with 1-2 engineers + 0.5 tax SME, indicative build 50k to 120k. New rule set on the existing data model, one new input. How we score and sequence →
Related solutions
WHT Health Check
Find the withholding tax you missed before ZATCA does.
VAT return ↔ GL ↔ e-invoice reconciliation
Rebuild every VAT return line from the ledger and from e-invoices.
VAT return preparation
A draft VAT return and its exception pack, built from transaction data.
Every imported service, reverse-charged in the right period.
Design partners shape the rulebook and review console, and get first access on pilot terms.