Zakat, Tax and Customs Authority (ZATCA), earlier known as GAZT, has implemented phase 1 of e-invoicing in the Kingdom of Saudi Arabia (KSA) w.e.f 4th December 2021.
This article explains the two phases of Saudi Arabia’s e-invoicing.
23rd December 2022
ZATCA announced that the businesses in KSA with greater than SAR 500 million turnover fall under the second targeted group under phase 2 of e-invoicing, and they must integrate their ERP/POS by 1st July 2023.
The generation phase is the first phase of Fatoorah or e-invoicing in the KSA. Phase 1 has been implemented from 4th December 2021 until 31st December 2022.
Applicable persons to whom the e-Invoicing Regulations apply must generate electronic invoices and related Credit and Debit Notes (CDNs) abiding by specified control and technical aspects in Saudi Arabia.
The detailed guidelines lay down the rules for generation, and compliant e-invoice solutions are called the Resolution on the Controls, Requirements, Technical Specifications, and Procedural Rules. The authority will continuously update the resolutions in the future as per requirements.
The requirements set forth for generating e-invoices and simplified e-invoices from 4th December 2021 up to 31st December 2022 are listed as follows:
The integration phase is the second phase of Fatoorah or e-invoicing in the KSA. The second phase shall apply to businesses starting from 1st January 2023.
The integration phase will be implemented in transitions and made mandatory for persons notified under the e-Invoicing Regulations.
Under this phase, the applicable persons under the e-Invoicing Regulations must integrate their e-invoice generating systems with the ZATCA’s or GAZT’s system. They are known as target groups in Saudi Arabia.
The target groups will get prior intimation about the integration procedures at least six months in advance from the implementation date set for integration in Saudi Arabia.
Accordingly, ZATCA notified on 24th June 2022 that the businesses with more than 3 billion SAR turnover in 2021 must implement e-invoicing in KSA from 1st January 2023.
The Resolution provides the rules for integration and necessary compliance with the Controls, Requirements, Technical Specifications, and Procedural Rules. The authority may update through resolutions in the future.
The following are the salient points on the second phase of e-invoicing or Fatoorah:
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