Preparing for e-invoicing in Saudi Arabia

Phase 1 changes in e-invoicing in Saudi Arabia

How is invoicing changing as of the 4th of December, 2021?

  1. All persons subject to e-invoicing must use e-invoicing compliant electronic solutions for the generation of e-invoices.
  2. E-invoicing must include the minimum additional fields mentioned in question 2.
  3. E-invoices should have QR codes.
  4. E-invoicing compliant systems must forbid the prohibited functions determined by the ZATCA. (See question 7)
  5. Simplified tax invoices, usually issued for B2C transactions must have a QR code.
  6. Tax invoices, usually issued for B2B transactions must have the buyer’s VAT number if he/she is VAT-registered, however, the QR code is not mandatory in the first phase.
  7. The taxpayer should keep a copy of all the issued tax invoices.

What are Phase 1 technical functionalities required for e-invoicing solutions?

  1. The ability to generate different types of invoices and notes
  • Simplified invoices and their associated credit or debit notes
  • Tax invoices and their associated credit or debit notes
  1. The format required for e-invoices and notes
  • No specific format is required as long as the required data and content is present in the invoices and notes
  1. The structure of e-invoices and notes as per ZATCA requirements
  1. Processing data and reinforcing security
  • The ability to export e-invoices and their associated notes to an offline local archival
  • E-invoices unit locks or a mechanism to record tampering evidence
  1. The ability to store and archive data
  • The ability to export e-invoices and their associated notes to an offline external local archival system. These files should contain a VAT registration number, the issuance date, the issuance time, and reference number
  1. The generation of QR codes for simplified invoices and associated notes
  • The seller’s name
  • The seller’s VAT registration number
  • The timestamp of the simplified invoice or debit/credit note (date/time)
  • The total amount including the VAT amount
  • The VAT total

What are prohibited functions specified by the ZATCA for e-invoicing compliant systems in phase 1?

  • Uncontrolled access
  • A lack of user management leading to anonymous access,
  • Absence of user session management
  • Ability to operate with a default password.
  • Tampering with the information:
  • Deletion or modification of e-invoices or their notes and logs
  • The generation of inaccurate time stamps
  • Non-sequential log generation
  • Resetting the electronic invoice counter.
  • Multiple Electronic Invoice sequence:
  • Allowing the ability to generate more than one electronic invoice sequence at any given time.

Do my electronic invoices have to be approved by ZATCA or a 3rd party in Phase 1?

Taxpayers are not required to have their electronic invoices approved by the ZATCA for phase 1.

Moving to the second phase of e-invoicing

If you receive a notification from ZATCA regarding the second phase of e-invoicing for your business? Contact us to help you set up your account.