Zakat, Tax and Customs Authority (ZATCA) of the Kingdom of Saudi Arabia (KSA) implemented phase 1 of e-invoicing w.e.f 4th December 2021. ZATCA included all resident taxpayers and third-party persons issuing invoices on behalf of the resident taxable person in phase 1 of KSA e-invoicing. However, it kept the non-resident businesses (for VAT purposes) out of the e-invoicing initiative.
As a next step, ZATCA intends to implement phase 2 of e-invoicing in waves from 1st January 2023. Accordingly, it notified that taxpayers with more than SAR 3 billion turnover in 2021 must implement phase 2 in the first wave.
This article explains how to generate e-invoices when your ERP doesn’t allow interaction with external systems.
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.
Unlike phase 1 of KSA e-invoicing, phase 2 requires businesses to integrate with ZATCA’s Fatoora portal to get clearance for B2B invoices and to report B2C invoices. Hence, you must integrate all your invoice-generating solutions, such as billing systems, PoS, ERP etc., with ZATCA to comply with phase 2 of Saudi e-invoicing.
However, in a few instances, you might not be able to integrate your ERP with ZATCA directly, as the ERP does not allow interaction with external systems. Below are a few instances:
e-Invoicing applicable businesses in KSA have to keep in mind that ZATCA doesn’t provide any platform to generate e-invoices. Currently, ZATCA is providing only APIs so businesses can integrate directly or through third-party solutions and comply with e-invoicing requirements. However, ZATCA might come up with its own e-invoicing solution in future to ease e-invoicing for small businesses.
ClearTax can help you with multiple methods to get clearance for B2B e-invoices and report B2C invoices in KSA, even though your ERP cannot interact with external systems. You can opt for any of the below methods to comply with e-invoicing requirements:
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