Quotation vs proforma invoice vs tax invoice: the difference for Saudi suppliers

Suppliers often mix these three papers up, and buyers notice. The simple rule is timing: the quotation comes before the order, the proforma comes after agreement and before delivery or payment, and the tax invoice comes after the supply or after money is received.

The quotation answers "what will it cost?". It carries your prices, validity, delivery time and payment terms, so the buyer can compare and decide.

The proforma invoice answers "what will the bill look like?". It repeats the agreed lines and totals in invoice form, so the buyer can raise internal approval or pay an advance.

The tax invoice answers "what was sold, and how much VAT is due?". It is the only one of the three that ZATCA regulates in detail. ZATCA's Guideline for Tax Invoicing and Records does not mention quotations or proformas at all; they are commercial documents that you design to suit your buyer.

A quotation should state a validity period. In practice, buyers treat a signed and stamped quotation as your offer until that date, so a price you cannot hold is a risk. Whether it binds you in a dispute is a legal question for a lawyer, not a tax rule.

A proforma should repeat the agreed quotation or purchase order reference, the lines, the total before VAT, the VAT at 15% and the total including VAT, and, if relevant, the advance requested and your bank details.

Two care points keep a proforma safe. First, title it clearly "Proforma invoice" or "فاتورة مبدئية". ZATCA requires a tax invoice to carry the title "Tax Invoice", so the word must never appear as the title of a proforma. Second, do not give it a number from your tax invoice sequence; tax invoices need their own sequential numbers.

If you are not VAT-registered, be careful: a non-registered person who issues a document used as a tax invoice, or collects VAT, faces a fine of up to SAR 100,000.

For sales to companies you issue a standard tax invoice. ZATCA's guideline says it is usually used business to business, and that it must be issued for any supply over SAR 1,000.

It must show, among other fields: the title "Tax Invoice", the issue date and time, a sequential number, your name, address and VAT number, the buyer's name, address and VAT number, each line with unit price, quantity, VAT rate and VAT amount, the totals, and ZATCA's QR code, required on standard tax invoices since January 2023. All fields must be in Arabic, other languages being a translation, and the tax amount must be in Saudi riyals.

Resident taxable persons must issue tax invoices electronically under the e-invoicing rules. The invoice is due no later than 15 days from the end of the month in which the supply took place. It is issued only once, and its issue date cannot be amended.

Our article on tax invoice requirements goes field by field.

Here is a worked example with fictional figures. On 3 March 2027 you send quotation Q-1042: SAR 20,000 before VAT, VAT SAR 3,000, total SAR 23,000, valid 30 days, 30% advance. On 10 March the buyer issues a purchase order.

On 11 March you send a proforma asking for the advance: SAR 6,000 plus SAR 900 VAT, so SAR 6,900. The buyer pays on 15 March. ZATCA's guideline treats the supply as made to the extent of the advance on the day it is received, so a tax invoice for SAR 6,900 is due within 15 days from the end of March: by 15 April 2027.

You deliver on 28 March. The tax invoice for the supply is also due by 15 April. The remaining SAR 16,100 including VAT is payable on the agreed terms. Ask your accountant or e-invoicing provider how to show the advance already invoiced.

The opposite mistake: sending a tax invoice as a payment request before delivery. If a tax invoice is issued before the supply, the tax is due in that period, paid or not.

On ENTEK, suppliers can submit invoices and generate stamped commercial documents: quotation, proforma, commercial invoice, packing list, COA, MSDS/TDS and contracts. The stamp, CR and VAT numbers come from your verified company profile, so the quotation and the proforma in this article can be produced from the same data.

When you win an RFQ on ENTEK you get a purchase order, which gives the proforma its reference. On the payment side, ENTEK shows what you are owed and when you will be paid. Transparent payouts, with ENTEK collecting from the buyer.

What ENTEK does not do: an ENTEK quotation, proforma or commercial invoice is not a tax invoice, and ENTEK does not file anything with ZATCA for you. For your own tax position, check with ZATCA or your accountant.

Use a ZATCA-compliant e-invoicing solution for your tax invoices.