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Standard or Simplified Tax Invoice? Which e-Invoice Do You Need To Issue?

Updated on: Apr 6th, 2023

4 min read

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The Zakat, Tax and Customs Authority (ZATCA) (earlier known as GAZT) is the tax regulating authority in Saudi Arabia (SA). ZATCA announced last year about implementing the e-invoicing initiative in two phases. Accordingly, it implemented phase 1 of e-invoicing from 4th December 2021.

Thereafter, it is planning to smoothly implement phase II of e-invoicing from 1st January 2023. Also, ZATCA recently announced that the first wave of phase II of e-invoicing applies to Value Added Tax (VAT) registered taxpayers whose revenue exceeded 3 billion SAR for the year ending 2021.

Phase 1 of KSA e-invoicing is all about digitising the invoice process. However, to comply with phase 2, taxpayers need to integrate their ERP/accounting system with govt. portal. Also, the e-invoice to be issued varies based on the type of supply.

This article lists the type of e-invoice to be issued in different circumstances.

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Types of e-Invoices in SA

ZATCA notified two types of e-invoices in Saudi Arabia, one is standard tax e-invoice and the other is simplified tax e-invoice.

Usually, standard tax e-invoices are issued for Business to Business (B2B) and Business B2G transactions. Also, buyers use B2B invoices for claiming input VAT deduction. However, simplified tax e-invoices are issued for Business to Consumer (B2C) transactions. It is to be noted that the buyer can not use a B2C invoice for input VAT deduction.

What e-invoice is to be issued?

ZATCA explained in the guidelines that the e-invoice to be issued varies based on the type of supply. Here’s the table explaining the type of e-invoice to be issued:

Type of Supply	Nature of Buyer	Invoice Value	Type of e-invoice to be issued
Taxable supplies	Taxable person	More than or equal to SAR 1000	Standard tax invoice
	Taxable person	Less than SAR 1000	Standard or simplified tax invoice*
	Non-taxable legal person^	More than or equal to SAR 1000	Standard tax invoice
	Non-taxable legal person^	Less than SAR 1000	Standard or simplified tax invoice*
Zero-rated supplies	Taxable person	More than or equal to SAR 1000	Standard tax invoice
	Taxable person	Less than SAR 1000	Standard or simplified tax invoice*
	Non-taxable legal person	More than or equal to SAR 1000	Standard tax invoice
	Non-taxable legal person	Less than SAR 1000	Standard or simplified tax invoice*
Export or Intra-GCC supplies		Any amount	Standard tax invoice
Nominal supplies		Any amount	Standard tax invoice
B2C transactions (Buyer details to be captured in case of private medical or educational services)		Any amount	Simplified tax invoice
Exempt supplies		Any amount	NA
Supplies under Reverse Charge Mechanism (RCM)		Any amount	NA
Imports		Any amount	NA
Supplies outside the scope of VAT		Any amount	NA

*In case of taxable supplies or zero-rated supplies to a taxable person or non-taxable legal person worth less than SAR 1000, seller can issue simplified tax invoices. However, if the respective buyer plans to claim input VAT deduction, he shall request the buyer to issue a standard tax invoice.

^Non-taxable legal person means a business establishment in KSA but not registered under VAT due to the threshold limit.

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