How to Export Invoices Under Saudi Arabia e-Invoicing

Zakat, Tax and Customs Authority (ZATCA) have announced various waves under phase 2 of Saudi Arabia e-invoicing. Accordingly, applicable businesses began integrating their systems with the Fatoora portal to generate ZATCA-compliant e-invoices.

However, businesses might be confused while generating e-invoices for export invoices because there are two views between Value Added Tax (VAT) and e-invoicing guidelines. So, a question arises on which guidelines businesses shall follow for generating e-invoices for export transactions.

This article clears the confusion and gives you an answer to the above question.

Export invoice under VAT guidelines 

Extract from VAT Guideline

In all cases, a supply may only be considered as an export where the supplier and customer both intend that the goods are transported outside the GCC territory as a consequence of that supply.

What does it mean?

The VAT guidelines state that if both the buyer and seller agree to transport the goods to a foreign country outside the territory of GCC, then only it will be considered an export Invoice. Further, if the place of supply is outside The Kingdom of Saudi Arabia (KSA), the invoice will be considered an export invoice.

Export invoice under e-invoicing guidelines

Extract from e-invoicing guidelines

An export invoice is issued to a foreign buyer as per KSA VAT regulation.

What does it mean?

The e-invoicing guidelines state that when a seller (within KSA) supplies goods/ services to a non-resident person with no VAT registration, the invoice will be an export invoice. Accordingly, if a business sells to a non-resident/ foreign buyer with no VAT registration, it shall generate the export invoice irrespective of the place of supply.

Conclusion

The GCC VAT agreement states that until all six countries in the GCC region implement e-invoicing, supplies within the GCC are also considered exports. Till now, KSA is the only country that implemented e-invoicing. Accordingly, businesses in KSA must generate export e-invoices for the supplies made outside KSA.