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Electronic invoicing (e-Invoicing) is becoming increasingly important for businesses in Saudi Arabia. The Saudi Arabian government, through the Zakat, Tax and Customs Authority (ZATCA), has introduced a system called "FATOORAH" to streamline the invoicing process and ensure better compliance with VAT regulations. This system requires businesses to generate and send invoices electronically rather than using paper. The integration of businesses into this system has been carried out in phases, with Waves 1 through 9 already completed. The upcoming deadlines apply to Waves 10 through 14, covering businesses with varying levels of VATable income. More information on further waves will be updated soon as ZATCA continues to expand the program.
Upcoming Deadlines for Businesses
The ZATCA has set specific deadlines for businesses to integrate their e-Invoicing systems with the FATOORAH platform. These deadlines depend on the VATable income of the business. VATable income is the total income that is subject to VAT (Value-Added Tax).
Wave 10. October 1st, 2024:
Businesses with a VATable income exceeding 25 million Saudi Riyals must have their e-Invoicing systems integrated with FATOORAH by this date.
Wave 11. November 1st, 2024:
Businesses with a VATable income exceeding 15 million Saudi Riyals (based on 2022 or 2023 income) must be integrated with FATOORAH by this date.
Wave 12. December 1st, 2024:
Businesses with a VATable income exceeding 10 million Saudi Riyals (based on 2022 or 2023 income) must meet the integration deadline.
Wave 13. January 1st, 2025:
Businesses with a VATable income exceeding 7 million Saudi Riyals (based on 2022 or 2023 income) must be integrated by this date.
Wave 14. February 1st, 2025:
Businesses with a VATable income exceeding 5 million Saudi Riyals (based on 2022 or 2023 income) must be integrated by this date.
Requirements for e-Invoicing Compliance
To comply with the new regulations, businesses must ensure their electronic invoicing solutions meet the following requirements:
- Invoice Formats: All electronic invoices must be generated in either XML format or PDF/A-3 format (which includes an XML file).
- Connectivity: The invoicing solution must be able to connect to the internet and integrate with external systems via the ZATCA's API (Application Programming Interface).
- Digital Signature: A digital signature must be used to ensure the authenticity of the invoice.
- Unique Universal Identifier (UUID): Each invoice must have a unique identifier.
- Hash Generation: A hash (a type of digital fingerprint) must be created to ensure the integrity of the invoice data.
- QR Code: A QR code must be included to provide quick access to the invoice details.
By understanding these requirements and deadlines, businesses can ensure they remain compliant with Saudi Arabia's VAT regulations and avoid any penalties.
Disclaimer: Content posted is for informational and knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.
