E-Invoicing in Saudi Arabia

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08 min read.

Requirements and details for Generation of Electronic Invoices and Electronic Notes: E-Invoicing in Saudi Arabia

E-Invoicing in KSA is a mandatory regulation and is critical because nonadherence will be linked to fines and penalties. However, on the upside, this is a great opportunity to digitally transform compliance, tax, and accounting, processes. Businesses can increase their operating margins significantly on the back of reduced transaction cost.

As we approach the 4th December deadline, businesses would need to prepare their backend tech & accounting software, carefully select a partner to implement the eInvoice solution, and change management activities for employees and customers/suppliers.

In terms of applicability, this could be applicable to businesses operating out of KSA, conditional on meeting the turnover/revenue criteria. It would include documents types of tax invoices, simplified tax invoices, and credit/debit notes. It would cover transaction types of – supply and export of goods and services, advance payments, nominal supplies, and intra-GCC supplies. Excluded transactions would include – import of goods, reverse charge supplies, exempt supplies, and advance payments related to exempt supplies.

A few of the technical requirements to keep in mind are around eInvoice format, content, QR Code, and Identification & Authorisation. The acceptable formats are UBL 2.1 or PDF/A-3 with UBL 2.1 embedded. The eInvoice content requires EN 16931 with KSA extensions, but an establishment can use the remaining fields as per their requirements freely. E-invoices need to have QR Codes mandatorily in a simple and extended format. As far as identity and authorization are concerned, each eInvoice is deemed to have an individual digital certificate with AdES on simplified tax invoices.

Data storage and archiving are some of the most critical requirements. The objective of this is to ensure document integrity and non-repudiation. The eInvoicing systems should have a document export capability. All the data has to be archived on the local (KSA) soil.

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