The Kingdom’s General Authority of Zakat and Tax (GAZT) has recently published a decision to implement electronic invoicing for resident taxpayers. There will be a grace period of 12 months until December 4, 2021. Starting from this date, VAT payers excluding the non-resident ones will be obliged to issue all invoices, debit notes and credit notes regardless of the VAT amount in electronic means.
Who is obliged to issue e-invoices?
-The taxable person residing in the Kingdom. (subject to VAT)
-The customer or any third party who issues a tax invoice on behalf of the resident taxpayer
Who is NOT obliged to issue e-invoices?
-Non-resident taxpayers trading in Saudi Arabia.
Who is eligible for e-invoice in Saudi Arabia?
Every taxpayer whether it is subject to this regulation or not may adopt electronic invoicing next year.
Should the subject taxpayer issue an electronic invoice for exports?
Yes, the taxpayer subject to VAT residing in the Kingdom must issue electronic invoices for all taxable supplies, whether in basic rate or zero rate.
What is the e-invoice format?
The invoices will have to be issued directly in electronic form: the paper invoices and paper invoices converted to electronic form by scanning are not classified as electronic.
Moreover, GAZT will not accept invoices in formats with unstructured data such as pdf and word. These indications of GAZT mean that the official format of e-invoicing will most probably be either XML or JSON.
What are the requirements to issue electronic invoices?
Any device, electronic system or application used to issue electronic invoices must have the following minimum requirements:
- The ability to connect to the Internet
- Commitment to data, information, or cyber security requirements and controls in the Kingdom
- Tamper-proof and includes anti-tampering mechanism
- Interchangeable with external systems using an application programming interface (API)
Will there be licenced service providers to provide the necessary electronic solutions?
No, the GAZT will issue requirements and control details of the electronic solutions later.
When will the General Authority for Zakat and Tax issue the technical details?
GAZT is going to announce two separate decisions within 80 days.
First Stage: Specifications for issuing and keeping e-invoices and e-notices (electronic debit and credit notes)
Second Stage: Specifications for linking electronic billing, debit and credit notes systems