KSA e-Invoicing FAQ are listed in an easily understandable manner for all the relevant persons looking at implementing the e-invoicing system in Saudi Arabia. KSA e-Invoicing FAQ can be accessed through the simple search tool provided below. Type in the keywords or the question you need to answer in the box below and get the latest answers for KSA e-Invoicing FAQ.
The e-Invoicing or Fatoorah applies to VAT-registered residents of Saudi Arabia, including any other persons who issue tax invoices on behalf of VAT-registered persons. However, non-resident taxable persons are kept outside the scope of the e-invoicing system.
The e-invoicing system will be rolled out in two phases in the KSA, as follows:
Phase 1: Generation Phase – This phase applies from 4th December 2021 to 31st December 2022 to all the VAT registered residents and notified persons under the e-Invoicing Regulations. These notified persons should generate the e-invoices or Fatoorah from a compliant e-invoicing solution with specified fields.
Phase 2: Integration Phase – This phase begins from 1st January 2023 onwards and involves targeted taxpayer groups to integrate with the ZaTCA’s system for clearance and reporting of e-invoices or Fatoorah in a transitional manner. It is in addition to requirements in phase 1. Additional fields will be specified for e-invoice for compliance. The system requirements and the integration date via API will be informed at least six months in advance.
The technical requirements are required for the e-invoicing solution providers such as the ECR or software vendors to refer and develop systems. Alternatively, these technical requirements are for in-house tech teams who build internal solutions for the use of the business organisation.
The taxpayers only have to approach such service providers or their IT teams to ensure the readiness of compliant e-invoice solutions before 4th December 2021.
The first phase of e-invoicing in KSA requires taxpayers to use electronic solutions or systems to generate e-invoices or Fatoorah. With this, they should no longer issue manual invoices. Further, the first phase needs invoices to contain the buyer’s QR code and VAT number on tax invoices if such buyer is registered under the VAT law.
To be specific, the QR code is not compulsory for standard e-invoices in the first phase, whereas it is compulsory for simplified e-invoices. In the first phase, generating invoices in XML, anti-tampering features, UUID, and integration with the ZaTCA system is optional.
The second phase makes all of the above as mandatory for taxpayers.
The first phase is known as the generation phase. The taxpayers registered under the VAT law in Saudi Arabia and specified under the e-Invoicing Regulations must implement e-invoicing or Fatoorah. All electronic invoices and electronic notes must be generated and stored using compliant electronic systems. Phase 1 applies from 4th December 2021.
The following are the changes from 4th December 2021:
1. Persons specified by the e-Invoicing Regulations must generate compliant e-invoices from compliant electronic systems.
2. Organisations cannot issue or use manual invoices.
3. The e-invoice or Fatoorah should have minimum additional fields.
4. The electronic system should be capable of generating QR codes, which were made compulsory.
5. The electronic system for e-invoicing must not support the prohibited functions as prescribed by the ZaTCA.
6. Be aligned with e-invoicing system solution providers or internal tech teams.
7. Stay updated for any changes in rules and regulations by visiting the ZaTCA’s website on business, security, technical, etc.
The minimum additional fields will turn a standard invoice into an e-invoice. On the other hand, a simplified e-invoice used for Business-to-Consumers (B2C) transactions will compulsorily have a QR code, along with its associated debit and credit notes. Moreover, a tax invoice and related notes for Business-to-Business (B2B) transactions must contain the VAT number compulsorily, whereas the QR code is optional.
The laws and regulations prescribe no specific file format for the first phase. However, the e-invoices should be issued and stored on the electronic e-invoice system per ZaTCA’s requirements.
No. The integration of the e-invoice solution with the ZaTCA system is not required on 4th December 2021. It is needed on or after 1st January 2023.
The QR code is compulsory for simplified e-invoices for B2C transactions. At the same time, it is optional for standard e-invoices for B2B and B2G transactions. Such a QR code is generated by the e-invoice solution itself and not by the ZaTCA system. Hence, businesses must get help from tech teams or service providers to upgrade their existing invoicing solutions to accommodate the feature of generating and printing QR codes on e-invoices, starting from 4th December 2021.
Information to be displayed are the name of the seller, their VAT registration number, timestamp of electronic invoice or electronic credit note or debit note, total VAT amount, and the total invoice amount due.
No. During the first phase, the taxpayers do not have to take approval, clearance or report e-invoices to ZaTCA.
The following are the prohibited activities under phase 1:
1. Absence of user management capabilities or allowing uncontrolled access such as accessing system as anonymous, and lack of user session management.
2. Tampering of e-invoices and associated logs or notes.
3. Presence of multiple electronic invoice sequences.
The second phase is known as the integration phase. Subjective taxpayers have to generate e-invoices or Fatoorah using compliant e-invoicing solutions as per the technical requirements and integrate with ZaTCA’s system. Phase 2 applies from 1st January 2023 in waves for the targeted taxpayer groups. These groups will be informed of the requirements for adopting the new system at least six months before the implementation date.
Phase 2 shall begin from 1st January 2023 for the first target taxpayer group, who will be notified at least six months before implementation.
The authority will implement phase 2 from 1st January 2023 in waves for targeted taxpayer groups. It needs the taxpayers to follow additional compliance requirements. They must ensure that tech teams and service providers re-configure the e-invoicing solutions for some additional technical requirements. Further, such compliant e-invoicing solutions must be integrated with the system of ZaTCA to generate e-invoices in a standard format.
In addition to the prohibited activities given for phase 1, export of the stamping key and time change are also not allowed in phase 2.
No. ZaTCA may enforce certification requirements for e-invoicing solutions at a later stage.
The electronic systems or electronic e-invoicing solutions must be compliant with the specifications listed by the ZaTCA. Solution or service providers must note those requirements, and taxpayers must ensure that tech teams and service providers comply with them.
Popular examples of e-invoicing systems include the following-
– Cash registers, available either online on web browsers or virtually on tablets.
– e-Invoicing software either installed on computer systems or phone or tablet or cloud-based.
Simplified e-invoices are issued for B2C transactions, whereas standard e-invoices that have the VAT registration number of the buyer must be issued in the case of B2B and B2G transactions.
However, the transactions related to exempt supplies, imports of goods, and supplies on which VAT is paid on a reverse charge basis do not require e-invoice generation.
Yes. As an exception, the e-invoicing system does not apply to non-resident taxable persons defined by the VAT law.
No. Any e-Invoicing system or solutions can be used to comply with the e-Invoicing Regulations of the KSA.
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