The implementation of e-invoice in Saudi Arabia will begin on 4 December 2021. After this, paper manual invoices will no longer be accepted. Phase 1 of the e-invoice in Saudi Arabia project will then begin. The taxpayer will have to generate the e-invoices with a compatible system. The e-invoice must contain information on the buyer’s tax number, the date of issue and the VAT breakdown, along with an optional QR code that can be added to B2B invoices, which is mandatory for B2C invoices or simplified invoices.
Introduction of E-Invoice in Saudi Arabia
It is important to note that the e-invoicing regulations will attract all the provisions related to a tax invoice in the VAT legislation, and any non-compliance will result in penalties.in addition to these regulations and the VAT legislation, the provisions relating to proof of electronic transactions and electronic signatures provided for in the Electronic Transactions Law in force in Saudi Arabia shall apply to electronic invoices and notes issued.
Why Is The Government Implementing E-Invoice In Saudi Arabia?
The Saudi government is bringing e-invoices to Saudi Arabia for a number of reasons. These broadly fall into two categories: efficiency and security. e-invoice in Saudi Arabia can increase efficiency in transactions by making trade more seamless, and efficient, and result in faster payments and reduced costs, whilst providing the government with greater insights into market conditions. This also enables fair competition, increases business competitiveness and improves consumer protection in the market, in line with international best practices.
The most important things to avoid when generating electronic invoices are:
- Manual invoicing;
- Issuing invoices that do not include the requirements of the Authority;
- Using a system that does not comply with the e-invoicing requirements issued by the Authority; and
- Deleting electronic invoices after they are given.
Guidelines for e-invoice in Saudi Arabia
- The E-Invoice in Saudi Arabia provisions will apply to all taxable goods and services subject to VAT (whether standard or zero rates).
- All VAT-registered business owners (except non-resident taxable people) within KSA who make sales within and outside KSA have to adopt the e-invoicing process. If you are a third party in KSA issuing a tax invoice on behalf of a taxable person, you will have to adopt the e-invoicing process too. For instance, an accounting firm that gives invoices on behalf of a textile seller would be responsible for these regulations.
- E-Invoice in Saudi Arabia is mandatory for all B2B, B2G, and B2C transactions. While issuing an e-invoice to a buyer, you should provide a printed copy as well.
- The invoices have to be in Arabic. You may opt to translate them or add another language, but it is mandatory to issue the e-invoice in Arabic.
How to check your system is compliant with the new rule?
As per ZATCA guidelines, a standard Tax Invoice should have the following mandatory & other common information printed in the Invoice
- Date of Invoice generated
- Sequential Invoice Number
- Travel Agency Tax Identification Number
- Travel Agency Name and Address
- Customer Name and Address
- Passenger Name, Ticket Number, Route, Class etc.
- Date of Service like Ticket Issue date
- Taxable Amount & Unit Price
- Tax Rate
- Amount of VAT charged in SAR
- Document Name
- Supplier Telephone Number, Fax etc.
- Other information like supporting LPO number, Payment details etc.
- The total amount including a VAT total
e-invoice in Saudi Arabia: How will the billing practices of my organisation change?
1. Persons specified by the e-Invoicing Regulations must generate compliant e-invoices from compliant electronic systems.
2. Organisations cannot issue or use manual invoices.
3. The e-invoice should have minimum additional fields.
4. The electronic system should be capable of generating QR codes, which were made compulsory.
5. The electronic system for e-invoicing must not support the prohibited functions as prescribed by the ZaTCA.
6. Be aligned with e-invoicing system solution providers or internal tech teams.
7. Stay updated on any changes in rules and regulations by visiting ZaTCA’s website.
e-invoice in Saudi Arabia: How to be e-Invoicing ready?
In Phase-I, check the internal system’s readiness with ERP integrations. In Phase II, Systrix’s robust platform will integrate with ZATCA systems directly without any changes in your ERP before Dec 4th, 2021. We provide Invoices in Arabic & English with QR codes.
We are Middle East’s leading Tax and Compliance Travel Accounting Software provider. We take no chances regarding the security of our client’s data. We are at the cutting edge of enterprise-grade cyber security. We offer a highly user-friendly platform with all the functionalities needed for your growth. No matter what platform you use, we connect with it. Get a demo today!