Saudi Arabia: Electronic Invoicing - Integration phase - First group updates
28 June, 2022
In brief
On 24 June 2022, the Zakat, Tax and Customs Authority (‘ZATCA’) announced further details on the implementation of the second phase of Electronic Invoicing (‘E-Invoicing’).
As per the announcement, the first group will include taxpayers who had revenues exceeding SAR 3 billion during the calendar year 2021.
ZATCA will notify the first group of the selected taxpayers in due course who will be required to implement the necessary specifications in order to integrate their billing system with that of ZATCA.
The announcement can be accessed here.
In detail
The E-Invoicing regime is a by-product and example of the economic renaissance and digital transformation that KSA is witnessing and is a continuation of a success story that began with the first phase of the application of E-Invoicing.
E-Invoicing has been rolled out in 2 phases by ZATCA in KSA:
Generation phase - went live on 4 December 2021 for all taxpayers
Integration phase - has a go live date of 1 January 2023 for the first group of selected taxpayers.
The integration phase of E-Invoicing entails certain additional requirements from the generation phase, the most prominent of which are:
Linking the billing systems of taxpayers with that of ZATCA system
Issuing E-Invoices based on a specific format including a number of additional elements in the E-Invoice XML file (such as UUID, hash, cryptographic stamp, etc.) which will be rolled out as part of the integration phase in addition to some other elements to be visible on the printed copy of the E-Invoice.
ZATCA has indicated that the integration phase will be implemented gradually and in groups and all the subsequent groups will be informed at least six months before the date set for linking their system with that of ZATCA.
The Takeaway
Taxpayers are recommended to assess their revenues for calendar year 2021 to ensure readiness for the integration phase of E-Invoicing and to implement the required changes.
The integration phase entails a comprehensive review of ERP systems to ensure a smooth integration with the ZATCA system. Taxpayers are recommended to conduct a gap analysis and take the required actions at the earliest.
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