ZATCA Announced Wave 1 Under Phase 2 of e-Invoicing in Saudi Arabia

Zakat, Tax and Customs Authority (ZATCA) announced the targeted taxpayers in the first wave under phase 2 (integration phase) of Saudi Arabia e-invoicing. It stated that the Value Added Tax (VAT) registered taxpayers whose turnover was more than SAR 3 billion during 2021 would fall under wave 1 of the integration phase. 

Hence, wave one applicable taxpayers should start integrating their e-invoicing solutions with the Fatoora portal starting from 1st January 2023.

ZATCA stated that phase 2 requires additional requirements such as:

• Integrate the e-invoicing solutions with the Fatoora portal
• Issue e-invoices in the notified format
• Include additional fields in the e-invoice

ZATCA earlier announced that they would implement phase two of e-invoicing in waves. Also, they would inform the wave 2 applicable taxpayers at least six months before the integration date.

ZATCA stated that wave 2 of e-invoicing is an extension of the ongoing digital transformation and economic development in Saudi Arabia. Further, ZATCA considers phase 2 as a continuation of the success story of phase 1 of e-invoicing.

Phase 1 of e-invoicing in Saudi Arabia achieved positive results; most importantly, it raised consumer protection in the country. Also, the authority witnessed great awareness of taxpayers during the implementation of the generation phase.

ZATCA implemented phase 1 of e-invoicing w.e.f 4th December 2021, which mandated VAT-registered taxpayers to:

• Avoid rising handwritten invoices 
• Stop using invoices through text editing software
• Onboard with a ZATCA-compliant e-invoicing solution
• Archive e-invoices and Credit or Debit Notes (CDNs)
• Include the QR code and other fields in the e-invoices