VAT at fifteen per cent, net to gross
The Interim Payment Certificate values the work net. ZATCA wants fifteen per cent on top, and the tax invoice has to match the certificate exactly. Muddle the two and the payment gets held up over arithmetic, not work.
QScope Team · 13 February 2026 · 5 min read
Value Added Tax in the Kingdom is administered by ZATCA at a standard rate of fifteen per cent. On a FIDIC construction contract that tax sits on top of the certified value, and keeping the net figure and the tax figure cleanly apart is what stops a valid payment being stalled by an invoice that does not tie back to the certificate.
The certificate is net
The Interim Payment Certificate the Engineer issues under Sub-Clause 14.6 states the net value of the Works executed. That is a construction valuation, not a tax document. VAT is not part of the Engineer assessment of what the work is worth. It is a statutory charge added afterwards on the taxable supply.
Net to gross
The arithmetic is simple, and simple is the point. Take the net amount certified for the period, apply fifteen per cent, and the sum of the two is the gross amount payable. Where retention is deducted, the VAT follows the certified value after retention, because that is the value of the supply in the period. Build the certificate net first, then add the tax as its own line, and the gross falls out without ambiguity.
The invoice has to match the certificate
ZATCA requires a compliant tax invoice, and on a construction job the cleanest tax invoice is the one that mirrors the Interim Payment Certificate. Same net value, VAT at fifteen per cent shown separately, same gross. When the Contractor invoice and the Engineer certificate disagree, the Employer accounts team has a reason to hold payment while the difference is reconciled, and that is time lost on a document error rather than a genuine dispute.
- Net certified value. Straight from the IPC for the period.
- VAT at fifteen per cent. Shown as its own line on the taxable amount.
- Gross payable. The two added, and the figure the Employer actually pays.
The discipline
Carry the net certified value onto the tax invoice unchanged, add the fifteen per cent as a separate line, and reconcile the invoice to the certificate before it goes out. On a giga-project processing hundreds of invoices, the ones that get paid on time are the ones the Employer can match to a certificate at a glance, with the tax shown where ZATCA expects to see it.
QScope keeps the net certified value and the VAT line separate, so the tax invoice you raise agrees with the Interim Payment Certificate to the halala.