Zakat, Tax and Customs Authority (ZATCA) announced that under the Value Added Tax (VAT), phase II of e-invoicing will be applicable from 1st January 2023 for registered taxpayers in Saudi Arabia having more than 300 billion SAR for the financial year 2021. Accordingly, businesses started integrating their accounting systems/ ERPs with the Fatoora portal.
Also, ZATCA mentioned in the e-invoicing guidelines that the taxpayers must submit the invoice data in XML format. This article explains the role of XML data enrichment in SA e-invoicing.
XML stands for an extensible markup language. It is a way to present information in a structured and machine-readable format. The ZATCA e-invoice format is based on XML and several other XML-based standards. It defines a set of rules for encoding documents in both human-readable and machine-readable formats.
The XML standard is a flexible way to create information formats and electronically share structured data via the public internet and corporate networks.
Data enrichment is improving existing information by adding missed or incomplete data. In simple terms, data enrichment stands for data massaging.
As mentioned earlier, in phase II, taxpayers must use the e-Invoice Generation Solution (EGS) unit to generate invoice data in XML format and share it with the ZATCA portal. Then the portal validates the invoice data and sends back the same for further use.
However, your EGS shall enrich the XML file before sharing it with the ZATCA. Three specific fields need to be added to your invoice data XML.
Let’s look at each of them.
It is to be noted that the taxpayer’s EGS shall enrich the XML file with ICV and PIH values before sharing invoice data with ZATCA.
Also, if there are any errors while generating the e-Invoice, the taxpayer must resolve the errors based on the functionalities supported by their ERP.