Integration with ZATCA: How to Integrate with Fatoora Portal in Saudi Arabia Seamlessly?

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.

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What is the integration phase in KSA e-invoicing?

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.

What are the requirements to integrate with ZATCA?

In addition to the phase 1 requirements, the businesses must have the below basic requirements to integrate with ZATCA:

• A compliant e-invoicing solution to integrate with the Fatoora portal.
• Stable internet connection to generate and get clearance for e-invoices in real time.
• Ability to generate and store e-invoices in XML or PDF/A3 with embedded XML format.
• Fulfilling additional fields required for phase 2.

What is the process flow for generating e-invoices in phase 2?

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.

Standard tax invoice generation flow in phase 2:

Here’s the image explaining the process flow of standard tax invoices in phase 2 in KSA e-invoicing:
 

Simplified tax invoice generation flow in phase 2

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.

How can ClearTax help you integrate with ZATCA?

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:

• 150+ smart data validations ensuring invoice data is as per ZATCA regulations, thereby providing error-free invoices.
• We generate UUID, invoice hash, Invoice Counter Value (ICV), and QR code & convert invoices into UBL 2.1 XML format.
• We integrate with ZATCA to get clearance/report XML invoices & receive certified XML back from ZATCA.
• ClearTax adds the Phase 2 QR code & certified XML into the existing invoice to generate the final PDF A/3 invoice.
• ClearTax automatic email APIs help you share the final PDF A/3 invoice with your customer.
• Our SLA-based cloud servers provide e-invoice data archival for up to 6 years.