RIYADH – The first phase of the mandatory electronic invoicing (FATOORAH) regulations has come into force in Saudi Arabia on Saturday. An e-invoice is a tax invoice that is issued electronically by each taxpayer subject to value added tax (VAT) in the Kingdom.
The E-invoicing involves implementation of the electronic invoice generating and saving mechanism.
It includes all taxpayers who come in the purview of VAT in the Kingdom, as well as any other parties issuing tax invoices on behalf of suppliers subject to VAT. Non-resident taxable persons for VAT purposes are exempted from this.
Tax payers must generate electronic invoices using compliant e-invoicing systems. Manual and hand-written invoices will no longer be considered as compliant tax invoices.
The Zakat, Tax and Customs Authority (ZATCA) stated that the first phase of E-invoicing means the complete cessation of using and issuing handwritten invoices, the invoices that have been written through computer programs such as text editing software or number analysis software.
The ZATCA noted that the first phase included the importance of ensuring the existence of a technical solution for E-invoicing that complies with its previously announced requirements.
Additionally, it has to ensure issuing and saving the E-invoices with all simplified elements, such as:
>The simplified tax invoices with a QR code.
> The serial number that identifies and simplifies the tax.
> The tax number of the buyer registered in the VAT for tax invoices.
>The invoice address depending on the type issued.
The authority lauded the enhanced awareness that it monitored among a large percentage of taxpayers and their readiness before the date set for implementing the first phase, saying that this confirms the authority's role in raising awareness and preparing private sector establishments with the requirements of applying E-invoicing.
The ZATCA has launched a detailed guide containing explanation of all definitions related to the E-invoicing, in addition to an explanation of the categories that will be subject to the E-invoicing regulations, types of E-invoicing and types of transactions.
In addition to launching an educational journey for E-invoicing on its website, which includes all the information and details related to E-invoicing, the stages of application, the requirements of each of the two stages, as well as the prohibitions of E-invoicing solutions.
It is noteworthy that Saudi Arabia launched in August the E-invoicing (FATOORAH) project, as it is considered as one of the most important projects being implemented in the Kingdom.
FATOORAH project is expected to produce a major positive impact on the Saudi economy, which will contribute to bringing down hidden economy transactions and promote fair competition. (SG)