Updated on: Apr 3rd, 2023
4 min read
The Kingdom of Saudi Arabia (KSA) planned to implement e-invoicing in two phases through Zakat, Tax and Customs Authority (ZATCA). e-Invoicing applies to all resident taxpayers except non-residents (for VAT purposes).
Accordingly, ZATCA implemented phase 1 of e-invoicing in Saudi Arabia on 4th December 2021. Also, ZATCA announced the implementation of phase 2 on 24th June 2022 and notified that businesses with a turnover of more than SAR 3 billion in 2021 must implement phase 2 from 1st January 2023.
This article explains how a taxpayer can integrate with ZATCA as the phase 2 implementation date is approaching.
Phase 2 of Saudi Arabia e-invoicing is called the ‘Integration Phase’. This phase mandates businesses to comply with technical and business requirements for generating electronic invoices. Also, in this phase, taxpayers must integrate their ERPs/PoS with ZATCA’s Fatoora portal to share data and information.
The seller must get ‘clearance’ for the standard tax invoices from ZATCA in real-time, and then only the invoice becomes valid and legal to share with the buyers. However, in the case of simplified e-invoices, the sellers should report them to ZATCA within 24 hours from the time of generation.
In addition to the phase 1 requirements, the businesses must have the below basic requirements to integrate with ZATCA:
The process flow for generating e-invoices differs based on the type of invoice. Understanding the process of generating electronic invoices in Saudi Arabia with the approaching phase 2 implementation date is necessary.
Here’s the image explaining the process flow of standard tax invoices in phase 2 in KSA e-invoicing:
Here’s the image explaining the process flow of simplified tax invoices in phase 2 of KSA e-invoicing:
Taxpayers must opt for a compliance e-invoicing solution and integrate with the Fatoora portal to follow the above invoice generation flows and generate e-invoices seamlessly.
ClearTax provides the ZATCA phase 2 compliant e-invoicing software. ClearTax’s restful APIs will integrate into your ERP or POS with ‘minimal to no change’. You can automatically register ERP/POS with a single click with ZATCA and receive a cryptographic stamp for each device.
Our APIs will act as middleware connecting the ERP/POS and ZATCA system, ensuring 100% e-invoicing compliance. Also, once the invoice is finalized, our API automatically sends invoice data to the ClearTax cloud platform for conversion to ZATCA E-invoice.
Below are the few features of ClearTax ZATCA compliant e-invoicing solution: