Saudi Arabia Makes Electronic Invoicing Mandatory:
In December 2021, Saudi Arabia made the electronic invoice compulsory for all taxpayers. The Zakat, Tax and Customs Authority (ZATCA) implemented the electronic invoicing system on December 4. ZATCA has proposed to implement it in two stages.
FATOORAH Electronic Invoicing for Saudi Arabia:
Saudi Arabia’s project for electronic invoicing, known as FATOORAH, includes B2C, B2G, and B2B transactions. The project was launched in December of 2020 when the ZATCA previously known as the GAZT released the electronic invoicing regulation. This clarifies the terms, requirements, and conditions applicable to electronic invoices and the accompanying documents. The ZATCA released more information about regulations on May 28th, 2021. These included specific technical specs, the requirements, and the rules governing each stage in the plan.
Who is responsible for the implementation of e-invoicing in Saudi Arabia?
The proposed rule applies to B2B transactions and will impact all residents of the country. In addition, this will also apply to those who issue invoices under the name of a taxpayer who is subject to VAT. Companies located outside Saudi Arabia are exempt.
The phases of the FATOORAH e-invoicing project and the key dates:
First Phase: 4th December 2021
Tax payers must create electronic invoices using a system that can include all required fields. The system also has to create and archive an electronic copy of the invoice to the customer. Invoices on paper are not accepted.
Phase 1 of the electronic invoice process requires the taxpayer’s VAT code, the date of issuance, and the VAT amount mentioned on the e-invoice. Optionally, issuers can include the QR code in B2B invoices, but they have to be sure to include the QR code on simple B2C invoices.
Phase 2: 1st January 2023
The second Phase is the “integration stage” or “integration phase”. Following this date, all invoicing software must be compatible with the ZATCA system. However, the integration with ZATCA will be done in stages based on the taxpayer’s tax category. In addition, ZATCA will notify taxpayers at least six months before their mandatory integration date.
It is necessary to send XML or PDF/A-3 (with XML) for all e-invoices, including tax invoices and simplified tax invoices. In addition, an e-invoice solution for creating electronic invoices needs to be able to connect with the Internet as well as connect with other systems using ZATCA API.
A digital signature, UUID, hash, and QR code are all procedures that ensure the authenticity of invoices.
The ZATCA has established the electronic invoice system and the technical requirements to create electronic invoices. Therefore, it is strongly recommended to start the transition process towards the brand new digital invoice system. Thus, the Phase 1 allows taxpayers to explore the system and lay the foundations of the best solution in line with ZATCA’s e-invoice system.
Absolute Solutions’ e-Invoicing Software:
Absolute Solutions is a company specializing in Electronic Data Interchange and Electronic Invoicing. At present, ABSOLUTE SOLUTION provides the best e-invoicing Software for Saudi Arabia, because, the e-invoicing application developed by Absolute Solution is 100% compliant with all ZATCA requirements.
Which helps you to create, store and share e-invoices with your customers as well as ZATCA’s e-invoicing system. Thus, you can have peace of mind, and you will not have to worry about any non-compliance with ZATCA requirements. Since, ABSOLUTE SOLUTION’s technological and regulatory experience allows it to swiftly and efficiently implement the ZATCA compliant e-invoice software, so you can have peace of mind.