What is E-Invoicing (FATOORAH)?
E-Invoicing is a procedure that aims to convert the issuance of paper invoices and notes into an electronic process. It enables the exchange and processing of invoices, credit notes, and debit notes in a structured electronic format between the buyer and seller through an integrated electronic solution.
What is an electronic invoice?
An electronic invoice is a tax invoice generated in a structured electronic format through electronic means. A paper invoice that has been converted into an electronic format through copying, scanning, or any similar method is not considered an electronic invoice.
Tax Invoice
A tax invoice is usually issued by a business to another business (B2B) and contains all required tax invoice elements.
Simplified Tax Invoice
A simplified tax invoice is usually issued by a business to a consumer (B2C) and contains all required simplified tax invoice elements.
How does E-Invoicing (FATOORAH) work?
E-Invoicing will be implemented in two phases in the Kingdom of Saudi Arabia (more details about the phases here). For the first phase, enforced as of December 4th, 2021, for all taxpayers (excluding non-resident taxpayers), and any other parties issuing tax invoices on behalf of suppliers subject to VAT, electronic invoice issuance will be very similar to invoices generated prior to 4 Dec 2021, with invoices issued through a compliant electronic solution and including additional fields depending on the type of the transaction.
For the second phase, enforceable starting January 1st, 2023 in waves, the electronic solution must be integrated with ZATCA's systems and e-invoices should be generated in the required format.
Phase One (Generation Phase):
Enforced as of December 4, 2021, for all taxpayers (excluding non-resident taxpayers) and any parties issuing tax invoices on behalf of VAT-registered suppliers. In this phase, invoice issuance will closely resemble the previous process but must be done through a compliant electronic solution and include additional fields depending on the type of transaction.
Phase Two (Integration Phase):
Starting from January 1, 2023, in waves. In this phase, the electronic solution must be integrated with ZATCA's systems, and e-invoices must be generated in the required format.
What Are the Required Fields for E-Invoices in Phase One and Phase Two?
Simplified Tax Invoice Sample
More details on the requirements availablehere
