Saudi Arabia to Begin e-invoicing Phase II from January 2023

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Riyadh November 16, 2022:

Having only introduced VAT on 1 January 2018, Saudi Arabia is leading the way in digitizing its tax invoices. The Zakat, Tax and Customs Authority (ZATCA) has given January 1, 2023 as the go-live date of the second phase.

Phase I consisted of ensuring that there is a technical e-invoicing solution compatible with the relevant requirements. This puts an end to handwritten invoices or invoices written through text editors. A fine of SR 5,000 will be applied for not issuing and saving the invoices electronically.

Phase II of e-invoicing will be implemented in a phased manner from January 2023, to establish integration between e-systems of taxpayers and the authority’s regulations. In addition to other requirements, Phase II introduces integration with ZATCA platform for continuous transaction controls requiring taxpayers to clear invoices ahead of transmission to buyers. The fine for omitting the QR Code and not reporting any malfunction in the issuing of the e-invoice to the authority starts with a warning. The fine for violating the deletion or modification of e-invoice starts from SR 10,000.

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