Saudi Arabia officially obliges electronic invoicing

The Kingdom of Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) has recently (May 2021) published the official e-invoice resolution for a nationwide mandate. Previously, a draft law was opened to public consultation in April. ZATCA has introduced changes to the draft law and released this resolution taken into consideration of the comments made by the business community. 

Is e-invoice mandatory in Saudi Arabia? Who is obliged for e-invoicing in Saudia Arabia?

E-invoices will be mandatory in Saudi Arabia as of 4 December 2021. The resolution imposes B2B and B2C electronic invoicing on resident taxpayers and third parties acting on behalf of them.

How does the e-invoicing system in Saudi Arabia work?

The KSA e-invoice system is expected to be a clearance model similar to the B2B e-invoicing of India when it is complete: Invoices in machine readable format - XML invoices - will be cleared by the Tax Authority before presented to the final customer in electronic form or hardcopy. In addition, taxpayers must electronically sign and report all the simplified invoices issued to the individuals to the e-invoice portal within 24 hours after generation. All these B2C e-invoices must include a QR code. This QR code will enable individuals to check the validity of an invoice by scanning from a mobile device. 

What is the timeline of e-invoicing in Saudi Arabia? 

The e-invoicing regulation is divided into substeps. 

  1. The first phase will comprise mandatory e-invoice generation and archiving as of 4 December 2021. Invoicing software must be able to generate all the tax invoices exchanged between businesses, simplified tax invoices issued to individuals and credit/debit notes in electronic format. E-invoices must contain the mandatory fields defined by the tax authority and comply with all the business and validation rules. A technical solution that is capable of exporting e-invoices for archiving and preventing tampering of invoices will be necessary.

  1. The second phase, integration with the tax authority’s portal and reporting of e-invoices will begin on 1 January 2023. According to the resolution, the tax authority will gradually mandate integration for different groups of companies. The companies under obligation will be published not later than 6 months before the deadline. Egypt has followed a similar approach throughout their e-invoicing journey. 

SNI solution is an end-to-end solution: a single SAP add-on handles all major steps:

How can SNI Saudi Arabia E-Invoice SAP Add-on help you ?

  • SNI Saudi Arabia E-invoice solution is an SAP add-on for creating and exchanging electronic invoices between trade partners including organizations and individuals. It can export e-invoices to a local storage for mandatory archiving. 

  • E-invoices are only available in electronic XML format. SNI solution is able to issue machine readable XML invoices and can display a human readable version.

  • Extraction of accounting and transaction data from SAP modules

  • Data mapping and processing

  • Integration and document exchange with the Tax Authority through SNI e-invoice connector or any connector chosen by the client