Saudi Arabia – postponement of second phase of mandatory e-invoicing and publication of final regulations
The Zakat, Tax and Customs Authority (ZATCA), previously called GAZT, has finished public consultation and published final documentation regarding controls, requirements, procedural rules and technical specification referring to the provisions of e-invoicing regulations, effective as of December 4th, 2021. One of the main changes in relation to the draft regulations is the postponement of the second (integration) phase of e-invoicing in Saudi Arabia until 1st January 2023.
The e-invoicing process called FATOORAH applies to taxable persons who are residents in the Kingdom of Saudi Arabia, as well to the customers or any third parties who issue a tax invoice on behalf of a taxable person who is a resident in the Kingdom according to the VAT Implementing Regulation.
The first phase of the implemented law, effective as of December, 4th 2021, requires companies to be able to generate tax invoices and simplified tax invoices, usually issued in transactions with consumers (B2C), in electronic, structured format, and to store compliant e-invoices electronically. E-invoices must include all mandatory fields in accordance with VAT regulations in addition to The VAT number of the buyer (if the buyer is a registered VAT taxpayer) and QR code – which is mandatory only for simplified tax invoices, while to “standard” tax invoices this can be added optionally.
The second phase (integration) focuses on transmission of e-invoices, additional functionalities and its integration with ZATCA systems by using an application programming interface (API). Furthermore, the second phase of the proposed regulations requires electronic invoices to be generated in XML or PDF/A-3 (with embedded XML) format, while the first phase does not mention any required e-invoicing format as long as the mandatory data are present on the invoices and in the notes. Furthermore, the taxpayer’s e-invoicing software must be able to generate a universally unique identifier (UUID), cryptographic stamp, hash and QR codes. Taxpayers will be notified by ZATCA on the date of their integration at least six months in advance, starting from January 1st 2023.
ZATCA_Electronic_Invoice_Resolution (gazt.gov.sa)
There’s more you should know about e-invoicing in the Kingdom of Saudi Arabia – learn more about the new and upcoming regulations.
ZATCA_Electronic_Invoice_Resolution (gazt.gov.sa)
