E-invoicing mandate in KSA
Phase 2 E-Invoicing (Integration Phase)
The Zakat, Tax and Customs Authority (ZATCA) has officially initiated the implementation of Phase 2 (Integration Phase) of the Saudi Arabian E-Invoicing (FATOORA) system. This phase focuses on integrating taxpayers' e-invoicing solutions directly with ZATCA's FATOORA platform, enabling real-time invoice validation, reporting, and regulatory compliance. ZATCA will notify the targeted taxpayers and guide them through the required integration procedures.
The Integration Phase is designed to enhance transparency, improve tax compliance, and automate invoice exchange between businesses and the tax authority. Organizations selected for this phase must ensure their e-invoicing software is fully compliant with ZATCA's technical and security requirements before completing the integration process.
Phase 2 enables direct integration between taxpayers' e-invoicing systems and ZATCA's FATOORA platform, ensuring secure, standardized, and compliant electronic invoicing.
– ZATCA
- 1. What is E-Invoicing (FATOORA)? It is an electronic process that replaces paper invoices with structured digital invoices, credit notes, and debit notes that can be exchanged and processed electronically between buyers and sellers.
- 2. Electronic Invoice: A tax invoice generated in a structured electronic format through an approved electronic system. Simply scanning or converting a paper invoice into a PDF does not qualify as an electronic invoice.
- 3. Tax Invoice (B2B): Issued from one business to another business and contains all mandatory tax invoice elements required by ZATCA regulations.
- 4. Simplified Tax Invoice (B2C): Issued by businesses directly to consumers and contains the simplified invoice elements specified by ZATCA.
E-Invoicing (FATOORA) in Saudi Arabia has been implemented in two phases. Phase 1, effective from December 4, 2021, required all resident taxpayers subject to VAT to generate invoices using compliant electronic invoicing solutions instead of paper-based systems. These invoices also include additional mandatory fields based on the transaction type.
Phase 2 (Integration Phase) builds on the foundation established in Phase 1 by connecting taxpayers' e-invoicing systems directly with the ZATCA FATOORA platform. This integration enables secure electronic invoice exchange, automated validation, and enhanced compliance, helping businesses streamline operations while meeting Saudi Arabia's evolving tax regulations.
