Introduction
In Saudi Arabia, invoicing is termed Fatoorah. If you are a taxpayer and resident in the Kingdom of Saudi Arabia then you can either select an e-invoicing system or can find an invoicing provider who can configure the system to offer e-invoicing solutions as per the ZATCA rules and regulations.
When Did E Invoicing in Saudi Arabia Start?
On 4 December 2021 e-invoicing in Saudi Arabia came into effect and the first phase was implemented. The second phase of the e-invoicing will be implemented from 1 January 2023. E-Invoicing (fatoora) was introduced in KSA as an extension of the economic boost up and digital transformation. After the success story that began with phase one.
The implementations of ZATCA E-invoicing second phase will now begin on 1 January 2023. As it received many positive feedbacks and results. One of the most important factors of ZATCA e-invoicing is raising the level of consumer data protection and reducing hidden economy transactions in the Kingdom of Saudi Arabia. Only Saudi Arabia-resident businesses should comply with the e invoicing obligation under the ZATCA phase regulations.
Background of KSA e Invoicing
The ZATCA e-invoicing regulation has made it compulsory for Saudi Arabia taxpayers' residents to issue invoices, including credit/debit notes, in digital format and store them electronically. However, the regulations require only Saudi Arabian taxpayers to print the electronic invoices and share a copy with the buyers.
The software enabled for the issuance of an e-invoice shall comply with all the rules and regulations and guidelines issued by the ZATCA and shall be updated from time to time to avoid any non-compliance. This software is in the starting phase of implementation as later it will have to be integrated with the GAZT’s (General Authority Of Zakat And Tax) and ZATCA (Zakat, Tax and Customs Authority) guidelines. The implementation of this process will be done in two phases. The first phase is called the generation phase. The second phase is called the integration phase.
What Is ZATCA Phase 1 E-Invoicing?
In phase 1 the registered taxpayer will have to generate invoices in an electronic format with a compatible system. The taxpayer will store the file and will be able to send an electronic copy to their customer. The e-invoice will contain a piece of detailed information on the buyer’s tax number, the date of issue and the VAT breakdown.
The QR code will also be added to B2B invoices. As QR code is compulsory for B2C invoices or simplified invoices. By scanning the QR code. The following fields will show up. Seller’s name, VAT registration number of the seller, timestamp of the electronic invoice or credit or debit note (date and time), VAT total, electronic invoice or credit/debit note total (with VAT), Hash of XML electronic invoice or CDN, VAT amount.
In the first phase, the taxpayers do not need to share the data and report invoices to ZATCA. Phase 1 is just about enabling the KSA resident taxpayers to begin using the E-invoicing system which can be used as an online cash register. The e-invoicing will be able to install on the computer or any electronic or cloud-based e-invoicing device.
What Is ZATCA Phase 2 Of E-Invoicing In Saudi Arabia?
In the second phase, all invoicing systems will have to be integrated or compatible with the ZATCA system. ZATCA will inform Saudi Arabia taxpayers at least six months in advance of the integration date. The e-invoices must be issued in either of the two regulated formats (PDF/A3 with embedded XML or XML) through particular e-invoicing solutions that comply with the new ZATCA system.
All the e-invoices from then on will go through ZATCA’s new invoicing platform via an API integration connecting each invoicing system to the central platform. Phase 2 will be more about the technical requirements. Your system needs to connect with external systems using APIs and generate a UUID (Universally Unique Identifier), a digital signature, a unique number to differentiate invoices, and a cryptographic stamp.
The implementation of the second phase will start on January 1, 2023. This phase will be implemented in different stages, targeting different Saudi Arabia taxpayers. The ZATCA will inform the Saudi Arabia taxpayers of the applicability of this stage, at least six months in advance. This phase is involved integrating the Saudi Arabia taxpayers billing software with that of the ZATCA system to share the data and information.
Once the invoice is issued using its own e-invoice software, it will then be shared with ZATCA for verification and validation. The whole process will be done in a real-time system. Where the seller will need to get the invoice cleared from the ZATCA system and then share the standard invoices with the customers.
What Are The Requirements of ZATCA Phase 2?
With only 1 month to go until the start of the highly anticipated phase 2 of the Saudi Arabia e-invoicing. Saudi Arabia Zakat, Tax and Customs Authority (ZATCA) has published the final specifications and guidelines for the provision of the mandate.
According to the ZATCA Laws, these are the following ZATCA compulsory fields required.
- Cryptographic Standards ID.
- QR code process.
- Tax Invoice and Simplified tax e-invoices.
- Debit and Credit notes.
- Generate and store e-invoices in the required format (XML) or (PDF/A3 with embedded XML).
What is the Solution of the Second Phase of ZATCA?
المرحلة الثانية Zatca حل
A Reliable ZATCA E-Invoicing Solution Provider
AALogics is a trustworthy vendor of ZATCA here you will get an e-invoicing solution complying with the ZATCA rules and guidelines.
Integrated With Magento
The ZATCA e-Invoicing solution provided by us gets seamlessly integrated with Magento.
Auto Data Validation
With AALogics Saudi Arabia's e-invoicing solution, you can auto-validate your e-invoice data to check whether it is according to ZATCA guidelines or not.
Bulk Generation Of E-Invoices
AALogics provides bulk e-invoice generation for both standard and simplified invoices with the generation of UUID, PIH, for B2B and UUID, PIH, QR Code, CSID, Timestamp and Date Stamp, for B2C.
100% Compliant Solution
AALogics provides a 100% compliant solution. While using you can ensure that your e-invoices are totally compliant with ZATCA.
Duplicate E-Invoice Protection
You can avoid duplicate e-invoices with the feature of duplicate e-invoice protection in AALogics advanced ZATCA e-invoicing fatoora extension.
Single Dashboard To Manage E-Invoices
With AALogics Saudi Arabia's e-invoicing extension, you can get a single dashboard to manage all your old and new invoice data in one place.
QR Code Generation
Your e-invoicing QR code gets automatically generated with the AALogics ZATCA e-invoicing extension.
Safe And Secure Data
AALogics host the e-invoice data on the client's server or cloud server, and limits archiving of that data to Saudi Arabia premises.
Invoices In Arabic And English
E-Invoices are generated in both Arabic and English language.
Generate PDF With Embedded XML Invoices
A3 PDFs with embedded XML e-invoices are automatically generated during the process of e-Invoice generation.
Dedicated Support Team
AALogics, also provides a dedicated support team to help you out with any e-invoicing issue.
Why Do You Need To Approach To ZATCA E-Invoice Solution Provider?
E-invoicing is currently being used almost all across the world. This is a natural evolution of the modern economy and e-invoicing will help modernize each country’s tax infrastructure, increase control by the authorities, and reduce administrative costs and tax fraud. Following this new worldwide trend, Saudi Arabia has also set the ground for a full modernization of its invoicing systems.
How Can AALogics Help?
Our specially developed ZATCA e-invoicing extension for Magento can help your business.
We are offering a huge discount on the extension till 1st Jan 2023.
