Mandatory e-Invoicing in the Kingdom of Saudi Arabia

KSA became part of the e‑Invoicing Revolution

- What does it mean, exactly?

The e-invoicing process called FATOORA applies to taxable persons who are residents in the Kingdom of Saudi Arabia, as well as to the customers or any third parties who issue a tax invoice on behalf of a taxable person who is a resident in the Kingdom according to the VAT Implementing Regulation.

The first phase of mandatory electronic invoicing was implemented on December 4, 2021, when the obligation was imposed on companies to issue invoices and simplified invoices (used in B2C relations) in electronic form. The aim of the second phase, which started on January 1, 2023, was integration, enabling the sending of e-invoices. Its completion is planned for 2024.

Who is obliged to use e-Invoicing

Who is obliged to use e-Invoicing in Saudi Arabia

All taxable persons (excluding non-resident taxpayers) and third parties issuing tax invoices on behalf of a taxpayer that is subject to VAT are obliged to send e-Invoices.

E-invoicing process description

E-invoicing generation phase

No e-invoicing format was required, as long as all required fields are included in invoices and notes - buyer's VAT number (if the buyer was a registered VAT payer) and QR code (which was mandatory only for simplified VAT invoices)
Ability to generate tax invoices and simplified tax invoices in electronic, structured format, and to store compliant e-invoices electronically

Integration phase

Focuses on transmission of e-invoices and its integration with ZATCA
Once an e-invoice is cleared by the authority, suppliers can share the invoice or associated note with the customers
Required electronic invoices to be generated in XML or PDF/A-3 (with embedded XML) format
Required unique identifier (UUID), cryptographic stamp, hash and QR codes
Simplified e-invoices may be shared directly with the customer while reporting of such invoices should happen within 24 hours of generation

Current phase

Taxpayers notified by ZATCA on the date of their integration at least six months in advance, starting from January 1st 2023

How integrity and authenticity may be ensured?

It is required to implement security measures in the form of an electronic seal, which is created using cryptographic algorithms.

What is the required format of an e-Invoice

Starting with the Integration phase, the invoice must be in XML format in order to be shared with the authority using the API for clearance and reporting.

Archiving requirements for e-invoicing in Saudi Arabia

Electronic invoices may be stored in a server on-premises in the KSA or in the cloud according to the provisions in VAT Law, VAT Implementing Regulation, E-Invoicing Regulation and resolutions and all other relevant Laws in KSA.

Why is Comarch the best choice?

We have 20+ years of experience in carrying out various EDI, e-invoicing, and other document exchange projects around the world. In those years, we have successfully connected more than 130,000 entities from over 60 countries.

1. Legal compliance
Full compliance with the latest data exchange regulations and modern data transfer standards
2. Digitization
Applying new technologies and IT solutions in order to streamline workflows and automate activities and procedures
3. Individual approach
Tailor-made solutions based on processes specific to each company – own road map and a suitable pace of changes
4.Security
Highest level of security for all sensitive and important company data

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