ZATCA is an acronym that stands for Zakat, Tax and Customs Authority
(ZATCA), formally known as the General Authority of Zakat and Tax (GAZT)
. ZATCA made it mandatory for resident taxpayers to be well-equipped to
modify, send, and save invoices from December 4, 2021.
The Saudi government has introduced several initiatives to digitize the economy
and promote e-invoicing. One such initiative is ZATCA or the Saudi Electronic Invoicing
System.The Saudi government introduced the first phase in 2021, while the second
phase is yet to start on January 1, 2023.This blog post will introduce you to ZATCA and
explain how businesses can prepare for the ZATCA e-invoicing mandate. We'll also touch
on the e-invoicing guide for KSA and ZATCA e-invoicing regulations.
Need help with ZATCA e-invoicing? Schedule a free Trail with one of our e-invoicing experts.
The ZATCA e-invoicing mandate that will be enforceable from January 1, 2023 is an integration
phase on the transmission of electronic invoices and notes.It will be implemented in waves by the
targeted taxpayer groups and will require that a person subject to the e-invoicing regulation to:
ZATCA in KSA (the Kingdom of Saudi Arabia) has adopted electronic invoicing regulations mandating
businesses to adopt new e-invoicing procedures in two phases.
E-invoicing is a process where businesses can send, receive, and store invoices electronically.
The main benefits of e-invoicing are that it is paperless, efficient, and secure.
The first phase of the e-invoicing process has already been rolled out, while the second one is still
on schedule.
E-invoices for KSA VAT taxpayers seem like regular VAT tax invoices, but they are generated through
an internet system. An e-invoice is not the same as a paper invoice that has been copied or scanned.
Once you issue an invoice, you are not able to edit it. But, you can send electronic notes that are VAT
compliant. For example, you cannot change the original invoice when a buyer returns your product, but
you can send them a credit note through your e-invoicing system.
E-invoicing in KSA can be divided into two types. They include:
Tax e-invoices are issued for B2G and B2B transactions. A Standard e-invoice is an XML file with all the
necessary data fields required by ZATCA.
Simplified e-invoices are for small businesses with a streamlined business structure and a low volume of
transactions. In this type of e-invoicing, the buyer does not need to use the invoice for input VAT deduction.
The Saudi government has introduced several initiatives to digitize the economy and promote e-invoicing,
such as ZATC. E-invoicing will help reduce the administrative burden on businesses, improve compliance,
and promote transparency.It will also help the government keep track of companies and their activities.
There are many benefits of e-invoicing for businesses, such as:
The Saudi government has issued e-invoicing regulations that every residential taxpayer should comply with.
The following are the regulations to expect from the ZATCA e-invoicing process:
ZATCA has embraced two electronic invoicing regulations mandating businesses to adopt new e-invoicing
procedures in two phases.
The Saudi Arabian government introduced the first phase on December 4, 2021. The following are the
requirements for businesses during this phase:
In this phase, however, you don't need to share data and report invoices to ZATCA.
The second phase will start on January 1, 2023. The following are the requirements for businesses during this phase:
During this phase, you will be required to share data and report invoices to ZATCA for validation and verification.
The e-invoicing process in KSA is not that different from other countries. The main difference would be the fact
that businesses will have to share data with ZATCA and report their invoices to them. Other than that, the process is quite straightforward.
1. The business owner or third-party accountancy firm generates an e-invoice using compatible software;
2. The e-invoice is then sent to the customer through email, fax, or any other electronic means;
3. The customer receives the e-invoice and makes the necessary payments;
4. The business owner or third-party accountancy firm then reports the invoice to ZATCA;
5. ZATCA will verify the authenticity of the invoice and validate it;
6. Once the invoice is validated, the business owner can proceed with delivering goods or services.
You should store the invoice in your system for future reference during each transaction.
The best way is to have a cloud-based solution so you can access the invoice anytime, anywhere.
E-invoicing is now mandatory in Saudi Arabia. Whether B2B, B2G, or B2C, all businesses must comply
with the new regulations set by ZATCA.
The e-invoicing process is not that different from other countries, but companies will have to share data
with ZATCA and report their invoices to them. skyERP s a cloud-based e-invoicing solution that helps
businesses comply with the new ZATCA regulations
Contact us SkyERP for business growth
.
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