A simplified e-invoice is a special type of e-invoice applicable only for retail (B2C) transactions. Unlike regular e-invoices, it is not mandatory to mention the buyer’s details in a simplified e-invoice. However, such invoices need to comply with requirements and details set forth by Zakat, Tax and Customs Authority (ZATCA) under its e-invoicing regulations.
Types of Fields in a Simplified e-Invoice
Mandatory Field: These are the fields to be included in an e-invoice and their related notes compulsorily. Any missing required field can land the taxpayer into trouble.
Conditional Field: These fields should be included in an e-invoice and related notes only if certain parameters are satisfied. Otherwise, they can be skipped.
Optional Field: These fields are not compulsory, and the taxpayers can exercise their discretion on whether or not to fill them. However, the compliant e-invoicing generation solution should give the option of filling these fields to the taxpayer.
A simplified e-invoice needs to contain the following fields:
- Type of Invoice: A simplified e-invoice needs to mention that it is a simplified tax invoice in its document title.
- Invoice Identifiers: These are certain unique fields that give a distinct identity to each simplified e-invoice. Such identifiers can be Invoice Reference Number (IRN), Universally Unique Invoice Identifier (UUID), etc.
- Date: Each simplified e-invoice that the seller generates needs to contain the date and time of its generation.
- Seller Identification: The simplified e-invoice should contain certain fields that help identify the seller’s identity issuing the invoice. Such fields can be seller name, address, VAT registration number, etc.
- Buyer Identification: The invoices need to contain details of the buyer to whom the invoice has been issued. Such fields can be buyer name, address or additional buyer ID. However, in the case of a simplified e-invoice. ZATCA has ruled out the requirements for including the buyer’s details in the invoice, except for the name.
- Line Items: This field, particularly, caters to the description of goods and services to be mentioned in the e-invoice like the description of goods and services, unit price, quantity, discounts, VAT total, tax code and subtotals.
- Totals: The invoice needs to show the total amount to be charged by the seller from the buyer and totals for discounts and VATs.
- Payment Terms: This field should specify if the mode of payment for the transaction is cash, credit/debit cards, bank transfers or others.
- Notes: These are inserted in every invoice to capture fields other than those covered above.
- Cryptographic Stamp: These are placed on invoices to ensure the authenticity of origin and integrity of the content on the e-invoice.
Mandatory Fields in a Simplified e-Invoice Applicable From Phase 1 (i.e. 4th December 2021)
A simplified e-invoice is issued to retail customers and thus, has fewer mandatory fields, as compared to a regular e-invoice. Under the 1st phase of e-invoicing, all the simplified e-invoices generated must be stored and archived. Under the 2nd phase, the seller shall be required to submit the same with ZATCA within 24 hours of generation. Some mandatory fields that are required to be filled in the e-invoice in Phase 1 are:
- Invoice Type Description
- Invoice Reference Number
- QR Code
- Invoice issue date and time
- Seller name and address
- Goods or service description
- Unit Price
- Subtotals (exclusive of VAT)
Conditional Fields in a Simplified e-Invoice Mandatory From Phase 1
Following fields have been made mandatory to be included in an e-invoice, however, only upon satisfaction of certain conditions:
- Special Billing arrangements, if any, with a third party
- Special transaction type flags
- Value Added Tax (VAT) Registration Number
- Group VAT Registration Number
- VAT Total
- Invoice Gross Total (inclusive of VAT)