Clarification: Section 22 of the Value Added Tax Law states that, in general, the tax liability for the sale of goods is the date of delivery of the goods (even if the consideration for the goods sold has not yet been received). Section 49 of the Value Added Tax Law allows for the amendment of an invoice when the transaction is cancelled or the terms of the transaction change, thus preventing a taxpayer from paying VAT on consideration that was not actually received by them (the Alkah case).

• Regulation 24A of the Value Added Tax Regulations, "Notice of Recognition of a Debt as a Bad Debt," deals with the manner of exercising the right to a refund of business transactions (inputs) as a result of the conversion of a debt to a bad debt. For example, Regulation 24A(b) of the Regulations sets out how a taxpayer who wishes to exercise their right to receive a refund of business transactions is required to prepare the credit notice they submit to the respondent, and what documents they must attach to the credit notice.
• Regulations 24A(c) and 24A(d) provide that a taxpayer may issue a credit notice for a bad debt only during the period between six months from the date of issue of the invoice for the transaction, and as long as three years have not passed from that date. Therefore, in accordance with the limitation set out in the above Regulation, a taxpayer is entitled to a refund of business transactions that were paid for a bad debt, only for a period of three years from the date of the transaction (subject to the limitations set out in Regulation 24A(d) of the Regulations).

In the opinion of the court, where the debt became bad after the expiry of three years from the date of the transaction, the taxpayer will be able to apply to the Director of the Value Added Tax to exercise their authority under Section 116 of the Value Added Tax Law and extend the deadline for submitting a credit notice for "bad debts".