Saudi Arabia: Electronic Invoicing - Integration Phase - Fourth Group (Wave 4) Updates

In brief

On 28 April 2023, the Zakat, Tax and Customs Authority (ZATCA), announced the criteria for the Electronic invoicing (E-invoicing) integration phase Wave 4 participants. 

As per the announcement, VAT registered taxpayers that have an annual taxable revenue (taxable supplies) exceeding SAR 150 million during the calendar year 2021 or 2022, are required to integrate their E-invoicing solutions with the FATOORA platform starting from 1 November 2023.

The official announcement can be accessed through this link.

In detail

E-invoicing in KSA was introduced earlier in two phases: generation and integration phase. The Generation phase already went live in December 2021 whereas ZATCA decided to roll out the Integration phase in waves as follows: 

• For taxpayers with taxable revenue exceeding SAR 3 billion, the go live date was 1 January 2023 (Wave 1)

• Taxpayers with taxable revenue of more than SAR 500 million, the go live date is 1 July 2023 (Wave 2)

• Taxpayers with taxable revenue exceeding SAR 250 million during calendar year 2021 or 2022, the go live date will start from 1 October 2023

Whereas for Wave 4 participants, as per the announcement made by ZATCA, taxpayers with taxable revenue exceeding SAR 150 million during calendar year 2021 or 2022 will be required to integrate their E invoicing generation solution with the FATOORA platform starting from 1 November 2023. 

It is expected that an official email will be sent by ZATCA to all taxpayers who have been selected as part of Wave 4 of the Integration phase of E-invoicing. 

The takeaway

Taxpayers are recommended to assess their revenues for calendar year 2022 and 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 the smooth integration with the ZATCA system. 

Taxpayers are recommended to conduct a gap analysis and take the required actions at the earliest.