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Latest Updates & Amendments in ZATCA e-Invoicing (Fatoorah) in Saudi Arabia

Updated on :  

08 min read.

The Zakat, Tax and Customs Authority (ZATCA or Authority), earlier known as GAZT, is the tax regulating Authority in Saudi Arabia (SA). In 2021, ZATCA announced implementing e-invoicing in two phases. Accordingly, it implemented phase 1 of e-invoicing from 4th December 2021. After that, ZATCA is set to implement phase 2 of e-invoicing in waves.

ZATCA timely notified the waves under phase 2 of e-invoicing as follows:

  1. Wave 1 under phase 2: Value Added Tax (VAT) registered businesses in KSA with more than SAR 3 billion turnover in 2021 fall under wave 1 w.e.f 1st January 2023.
  2. Wave 2 under phase 2: Businesses registered under KSA VAT whose turnover is more than SAR 500 million in 2021 fall under wave 2 w.e.f 1st July 2023.

This article provides the latest ZATCA updates on e-invoicing (Fatoorah).

23rd December 2022
ZATCA announced that the businesses in KSA with greater than SAR 500 million turnover fall under the second targeted group/ wave 2 under phase 2 of e-invoicing, and they must integrate their ERP/POS by 1st July 2023.

ZATCA updates on Fatoorah (e-invoicing)

23rd December 2022

Wave 2 under phase 2 of Saudi e-invoicing

ZATCA announced that the businesses registered under KSA VAT having more than SAR 500 million turnover in 2021 fall under wave 2 of phase 2 of Saudi e-invoicing. They must generate phase 2 complaint e-invoices from 1st July 2023.

Here’s the complete update on wave 2 under phase 2.

21st December 2022

Phase 2 of e-invoicing production goes live

ZATCA announced that the Fatoora portal goes live for production on 26th December 2022, and applicable businesses can start sharing invoices with ZATCA. It clarified that the testing on the production environment ends on 23rd December 2022.

Also, ZATCA will set up a new simulation environment similar to the production environment on 27th December 2022. This simulation environment would be identical to ZATCA’s production environment.

30th November 2022

ZATCA announces the cancellation of fines and penalties

ZATCA announced the ‘Cancellation of Fines and Exemption of Penalties Initiative’ and extended the tax initiative for six more months. As per the earlier announcement, this initiative would have ended by 1st December 2023; however, now it has been extended to 31st May 2023.

The exemption of fines decision includes the fines for violation of VAT field control related to applying the e-invoicing regulations and other general regulations.

Click here to read more about this update.

24th June 2022

ZATCA Initiates Procedures for Implementing Phase 2 (Integration Phase)

Earlier, ZATCA clarified that phase 2 would be implemented in waves by dividing taxpayers into targeted taxpayer groups and will notify them six months before their wave. Accordingly, it announced that the first wave of phase 2 applies to Value Added Tax (VAT) registered taxpayers whose revenue exceeded 3 billion SAR for the year ending 2021.

Also, ZATCA stated that Phase 2 (Integration Phase) requires additional requirements to integrate the taxpayer e-invoicing solutions with the Fatoora portal.

Here’s the complete update on Phase 2.

4th December 2021

Phase 1 of e-Invoicing Enters into Force

ZATCA announced that the first phase of e-invoicing (Generation Phase) would be effective on 4th December 2021. The first phase applies to all VAT-registered taxpayers and other parties issuing tax invoices on behalf of the taxable supplier. However, taxpayers not residing in Saudi Arabia were kept out of the scope of e-invoicing.

Click here to read more about this update.

16th November 2021

ZATCA releases the Violations and Fines related to e-Invoicing

ZATCA (Authority) announced the violations and fines under phase 1 of e-invoicing, starting on 4th December 2021. The violation of not issuing electronic invoices begins with a fine of SAR 5,000, while the following violations start with giving a warning:

  • Not adding the QR Code in the simplified tax invoice
  • Not mentioning the VAT registration number on the tax invoice
  • Failure to notify the Authority of any malfunction that hinders issuing e-invoices

Also, ZATCA clarified the violation of amending or deleting e-invoices after issuance attracts a fine of SAR 1,000. 

It is important to note that all fines are applied based on the type of violation and the number of repetitions.

Click here to read more on e-invoicing violations and fines.

04th November 2021

30 Days Left to Comply with Phase 1 of Saudi Arabia e-Invoicing

ZATCA reminded taxpayers to speed up the necessary arrangements to comply with the phase 1 requirements, which has 30 days remaining for the implementation date, i.e., 04th December 2021.

Click here to read more about this update.

05th September 2021

90 Days Left for the Enforcement of Phase 1, i.e., Generation Phase

The Authority urged the taxpayers to start with the necessary preparations to comply with the Phase 1 requirements as e-invoicing (Fatoorah) implementation will begin in 90 days. 

Click here to read more about this update.

24th August 2021

ZATCA Launches e-Invoicing (Fatoorah) Project

ZATCA launched the ‘Fatoora’ project on 24th August 2021 in the presence of the Governors of the ZATCA, Digital Government Authority, Governor of the General Authority for Small and Medium Enterprises (Monsha’at) and the CEO of The National Anti-Commercial Concealment Program. Also, the e-invoicing solution providers were present in the meeting.

ZATCA Governor stressed that the e-invoicing (‘Fatoora) project is one of the most important and ambitious national projects led by the Authority. This initiative is an extension of various digital projects that Saudi initiated recently to achieve the ambitious digital transformation goals mentioned in the Kingdom’s Vision 2030.

Click here to read more about the launch of the Fatoorah project.

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