What is a credit note, and when is one issued?

A document that reduces what a customer owes on an earlier invoice: goods returned, a service cancelled, a wrong price. It is the opposite of an invoice, goes to ZATCA like one, and carries the original invoice's number.

The system issues one:

• when you cancel an invoice sent to ZATCA (automatically, for its full amount);
• when you record a sales return against an invoice;
• from Accounting → Credit notes for service invoices.

A credit note only reduces what the customer owes; if the customer paid and you are giving money back, record the refund on the return.

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