Zakat, Tax and Customs Authority (ZATCA), the taxation authority in Saudi Arabia, implements e-invoicing in a phased manner. It implemented phase 1 from 4th December 2021 and phase 2 in waves from 1st January 2023. Also, ZATCA classifies the taxpayers for phase 2 and notifies them six months before their wave. As of now, it announced the following waves:
- Wave 1 under phase 2: Saudi businesses registered under Value Added Tax (VAT) having more than 3 billion SAR turnover for the year ending 2021 fall under wave 2 w.e.f 1st January 2023.
- Wave 2 under phase 2: VAT-registered businesses having a turnover of more than SAR 500 million and less than SAR 3 billion in 2021 fall under wave 2 from 1st July 2023.
- Wave 3 under phase 2: Businesses registered under KSA VAT having more than SAR 250 million and less than SAR 500 million turnover in 2021 or 2022 fall under Wave 3 w.e.f 1st October 2023.
- Wave 4 under phase 2: VAT-registered businesses with more than SAR 150 million and less than SAR 250 million turnover in 2021 or 2022 fall under wave 4 from 1st November 2023.
Hence, the applicable taxpayers shall integrate their ERP/POS with ZATCA on time to generate phase 2 compliant invoices.
e-Invoice generation workflow in SAP B1
Here’s the e-invoice generation workflow in SAP B1:
- The entire workflow, including invoice generation, e-invoice conversion, PDF A/3 generation, and emailing of invoices, can be performed in SAP B1 ERP.
- The user doesn’t have to log in to any other platform and can seamlessly complete the actions in SAP B1.
- End-to-end e-invoice generation and ZATCA approval flow happen immediately, so it does not delay the user’s actions.
- The trigger to generate e-invoices in SAP B1 can be done in two ways. The first is where the user selects one or more pending invoices and clicks “Generate E-Invoice”. Whereas in the second one, the e-invoice will automatically be generated once the user creates or approves the invoice in ERP.
Role of middleware in ZATCA integration
Middleware is software that sits between two other components. From the Saudi e-invoicing perspective, middleware is software with APIs to integrate with ZATCA and perform numerous e-invoicing functions.
The e-invoicing middleware comes with the following features:
- RESTful APIs to easily integrate with any ERP/ POS
- Integration with minor changes to ERP/POS
- One API to support all document types
- Ensures uninterrupted connection with ZATCA
- Seamless generation of e-invoices
- Creation of invoices in PDF/ A3 format with embedded XML
How can ClearTax help you easily integrate SAP B1 with ZATCA?
ClearTax APIs act as middleware connecting the ERP/POS and ZATCA system and ensure 100% e-invoicing compliance. ClearTax automatically registers hundreds of ERP/POS in a single click with ZATCA. Further, it receives a cryptographic stamp for each device.
It comes with below features:
- 150+ smart data validations to ensure invoice data is as per ZATCA regulations and invoices are error-free.
- We generate mandatory fields such as invoice hash, previous invoice hash, UUID, invoice counter value, and QR code.
- Our software converts the invoice data into ZATCA-specified UBL 2.1 schema in XML format.
- Our API automatically sends invoice data to the ClearTax cloud platform for conversion to ZATCA complaint e-invoice.
- ClearTax adds Phase II QR code & certified XML into the existing invoice to generate the final PDF A/3 invoice.
- We provide e-invoice data archival facility for up to six years on SLA-based cloud servers.