Self-billing is a case where the buyer raises a tax invoice for the goods and services received on behalf of the vendor. This tax invoice will contain complete information about goods and services received and the tax amount, which the buyer will claim as input tax credit.
As per e-invoicing guidelines issued by ZATCA, the self-billing e-invoices generated by the buyer will contain an electronic marker indicating this fact. This marker will be generated automatically and will not be visible on the human-readable version of the e-invoice. The human-readable format of the invoice must contain a statement declaring that the invoice is a self-billing invoice.
Self-billing can be advantageous, especially for small suppliers and sub-contractors who provide low-value but high-volume goods/services. Also, suppliers making continuous supplies to the customers such as laundry services to hotels, security services to banks, food supplies to restaurants can adopt self-billing for accurate and timely compliance to VAT laws in KSA.
Al Dua regularly buys rice for their Asian cuisines from Al Bandino, a trusted name in Basmati rice in Saudi Arabia. Al Dua (customer) has entered into a contract with Al Bandino (supplier) to raise an invoice for the collective amount of rice supplied to the restaurant at the agreed price at the end of the month.
Both AL Dua and Al Bandino have to archive the copy of the e-invoice in their records on a system according to the provisions in VAT Law, VAT Implementing Regulation, e-Invoicing Regulation, and other relevant regulations in KSA. Also, the generated e-invoice should be compliant with the specification and requirements of ZATCA so that it can be integrated with the ZATCA portal once it is mandated.
Al Vadeh LLP enters into a 1-year contract to provide housekeeping services to Al Kamal Hospital. They further entered into an agreement that Al Kamal would raise a self invoice at the end of every month as per the agreed amount. Al Vadeh will verify the information in the invoice and archive them. Also, Al Kamal should take care that his e-invoice must be compliant with the specification and requirements of ZATCA.
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