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Saudi Arabia e-invoices (FATOORAH) 4 December 2021

Electronic invoices in two phases: Introduction (Dec 2021); and Integration (Jan 2023)

Saudi Arabia is implementing the requirement for B2B electronic invoices for VAT transactions by resident businesses from 4 December 2021. Taxpayers will not have to submit full e-invoices (FATOORAH) to the ZATCA tax authorities in real-time until 1 January 2023. Non-resident taxable persons for VAT purposes are excluded.

This follows examples in Europe (e.g. Italy) and from around the world whereby tax authorities seek to gain transactional-level details of tax liabilities to help detect and prevent evasion. Check VAT Calc’s global live VAT invoice transaction and e-invoice reporting tracker to see where else real-time submissions of invoices is being implemented.

The Zakat Tax and Customs Authority (ZATCA) will roll out the new invoicing rules in two phases:

Phase 1, Issue and Storage (Generation), 4 December 2021

The covers the obligations to issue, receive and store sales and purchase e-invoices in a secure manner from e-invoicing system. The scope will include the following transactions:

  • Domestic;
  • Zero rated; and
  • Exports

The following transactions are excluded:

  • Exempt supplies
  • Import of goods; and
  • Supplies subject to reverse charge mechanism

Companies will be notified by ZATCA of the eligibility for Phase 1 several weeks in advance. Invoices will be required to contain a QR Code for B2C invoices at least. B2B will remain optional.  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.

ZATCA laid out in May of this year the basic requirements for the Phase 1, Issue and Storage, stage. This covered the:

  • Controls, requirements, technical specifications, and procedural rules to implement the provisions of the e-invoicing regulations
  • e-invoice XML implementation requirements;
  • security structures; and
  • QR Code invoice requirement

It will be possible to opt to move immediately to the Phase 2 Live Reporting phase in December 2021.

E-invoicing systems may include: Online cash registers, virtual cash registers on tablets, e-invoicing software installed on a computer, e-invoicing software in- stalled on phone or tablet and cloud- based solutions are examples of e-invoicing solutions.

Phase 2, Live Invoice Reporting (‘Integration’), 1 January 2023 (delayed from 1 Jul 2020)

This phase mandates the obligation to share live invoices with ZATCA. Businesses will be informed at least six months in advance of their eligibility for Phase 2 requirements. Invoices will then be given an electronic stamp after being verified for basic details. All invoices must be produced in XML, with some anti-tampering features such as digital signature, cryptographic).

VAT Calc’s in real-time global Calculator and Auditor  services produce instant and accurate tax calculations into your ERP, billing, e-commerce or e-invoicing systems. This includes Saudi Arabia, other Gulf states as the follow and the rest of the world.

Middle East & Africa e-invoicing


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