KSA gears its switch over to E-Invoicing as per ZATCA

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KSA – September 2, 2021:

The Zakat, Tax and Customs Authority (“ZATCA”) launched the electronic invoicing project (FATOORAH) on August 24, 2021 to bring transparency into the economic transactions and promote fair competition. During the official inaugural ceremony, ZATCA highlighted the importance of the new E-invoicing system for its economy and provided an overview its implementation mechanism.

E-invoicing in KSA is given the deadline of December 4, 2021 for the Generation Phase (Phase I).

  • Phase 1 (Generation phase)- Specific criteria are to be adhered to for all invoices, credit notes and debit notes issued by taxpayers in KSA as of 4 December 2021.
  • Phase two (Integration Phase)- Additional requirements are to be fulfilled by 1 January 2023, where invoices need to be exchanged with and pre-approved by the tax authority. This warrants changing software currently being used and choosing one that is compliant with ZATCA’s directions.

ZATCA has published a Simplified Guide and Detailed E-Invoicing guide that comprises detailed information the applicability of E-Invoicing to various industries, types of invoices, taxable persons and transactions subject to invoicing and technical guidelines pertaining to E-Invoicing Solution Requirement.

ZATCA has also recently released a list of E-invoicing solutions providers who meet the qualification requirements.

The FATOORAH aims to narrow down disguised and illegal establishments. It will activate the consumer’s role in monitoring and reporting, bringing transparency over the movement of funds, control over crimes and other violations. When implemented accurately, it can alleviate the administrative burden both for businesses and the tax authority.

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