These regulations are being rolled out so that businesses can work more efficiently and securely.
The ultimate goal of this move is to integrate your business data with the ZATCA system to make trade more seamless and transparent. The government can standardize the way invoices are reported to the system, with a common, machine-readable format, while also staying updated on the transactions that get pushed to their portal. Paper storage and hand-written invoices will be phased out and, since all invoices will be authenticated on the ZATCA portal, fraudulent activities such as fake invoices can be detected.
E-invoicing will also create a common database for audits. With this readily available information, tax authorities won’t need to conduct audits as frequently as before.
- A better experience for sellers and buyers. When you issue invoices quickly in real time, input tax credits will be processed faster.
- Electronic data will be more secure and less error-prone than paper entries. With a proper system for validating invoices, there will be fewer chances for fraud, leading to fair competition and improvement of trade.
- A streamlined electronic invoicing process reduces slip-ups and additional hassles for business owners. Your workload gets reduced, you get paid faster, and you can retrieve documents easily when storing them digitally.
To comply with the rules, it’s essential that every resident taxpayer is prepared for einvoicing. Here’s what you need to know about how the KSA VAT einvoicing regulations will impact you, and what you need to do in the future.
E-invoices for Phase 1 (4 December 2021) are similar to current invoices, with minimum additional fields:
a. For simplified tax invoices and their associated notes (usually issued for B2C transactions) a mandatory QR code.
b.For tax invoices and their associated notes (usually issued for B2B transactions), an optional QR code and mandatory VAT number of the buyer if the buyer is a registered VAT taxpayer.
There is no specific file format mandated for Phase 1, however, invoices must include the mandatory fields and must be issued from an electronic system meeting ZATCA’s requirements. In addition, electronic copies of all issued invoices must be stored by the taxpayer.
Yes, it includes the following:
– Seller’s name
– VAT registration number of the seller
– Time stamp of the Electronic Invoice or Credit/Debit Note (date and time)
– Electronic Invoice or Credit/Debit Note total (with VAT)
– VAT total
PHASE 1
December 04, 2021
PHASE 2
January 01, 2023
