Navigating Phase 2 of E-Invoicing with Wafeq: Ensuring Seamless Integration for Saudi Arabian Businesses



As Saudi Arabia strides towards a digital economy, the launch of the second phase of e-invoicing, known as the Integration Phase, on January 1, 2023, marked a significant milestone. This phase mandates taxpayers with a taxable turnover exceeding half a billion SAR (approximately 133 million USD) in 2021 to integrate their e-invoicing solutions with ZATCA's Fatoora Portal.

Amid these transformative changes, Wafeq emerges as a reliable partner to businesses, ensuring seamless integration and compliance with the new e-invoicing requirements. This article will explore Wafeq's role in helping businesses navigate the Integration Phase, its contribution to enhanced tax compliance, and its technical support in the journey toward a more transparent, efficient, and digital economy in Saudi Arabia.

The Role of Wafeq in the Integration Phase

Wafeq is deeply committed to assisting businesses in aligning their systems with the ZATCA's Fatoora Portal, as part of the new e-invoicing regulations. This is especially crucial for businesses that have surpassed the taxable turnover threshold. To ensure adherence to the new norms, Wafeq is actively supporting businesses to modify their e-invoicing formats, which now mandate the use of XML as stipulated by the ZATCA. In addition, Wafeq also guides businesses to optionally use the PDF/A3 format with the XML embedded, which can prove to be an effective format for sharing invoices with customers.

Understanding the Integration Phase

The Integration Phase of e-invoicing introduces new requirements that can be complex for businesses to navigate on their own. However, Wafeq simplifies this process by providing a comprehensive understanding and solutions for compliance. To make the e-invoicing system more transparent and efficient, the new rules necessitate businesses to incorporate additional data fields in their tax invoices and to transmit these invoices to ZATCA's system within 24 hours of issuance. Wafeq's tailored solutions not only aid businesses in meeting these requirements but also help to prepare a clearance for tax invoices, including debit and credit notes.

Phase 2 Technical Support from Wafeq

Throughout the process of digital transformation, technical support plays a vital role in ensuring a seamless transition. Wafeq, with its dedicated team of experts, provides a detailed breakdown of the technical functionalities required in phase 2 of e-invoicing, established by ZATCA.

In the integration phase, businesses are required to adopt several new technical functionalities, including the ability to issue and store invoices in approved XML or PDF-A3 format, embed XML in e-invoices, and integrate their e-invoicing systems with the Fatoora platform. To ensure seamless internet connectivity, additional fields in the e-invoice for the second phase need to be accommodated. Wafeq guides businesses through these technical changes, ensuring that they not only understand these new requirements but are also able to implement them effectively.

Moreover, Wafeq provides a suite of solutions designed to meet these technical requirements. This includes support for the verification processes using the Software Development Kit (SDK), guidance on meeting the needs of the integration and linking phase, and assistance in implementing e-invoice specifications and security features. Wafeq also provides training and resources to help businesses ensure their e-invoices and credit/debit notices are compliant with e-invoicing regulations.

By providing such comprehensive technical support, Wafeq ensures that businesses can navigate the transition to the second phase of e-invoicing smoothly, effectively meeting ZATCA's requirements and contributing to improved tax compliance.

Ensuring Compliance: Wafeq's Guidance on Prohibited Functions

In the realm of e-invoicing, there are certain functionalities that are explicitly prohibited by the Zakat, Tax and Customs Authority (ZATCA). These prohibitions aim to foster transparency, consistency, and compliance across all businesses, preventing the potential misuse of e-invoicing systems.

The prohibited functionalities specified by ZATCA include altering or manipulating e-invoice data once it's issued, issuing e-invoices without the required details, or failing to issue an e-invoice when legally required. Additionally, companies are prohibited from using a system or software that is not approved by ZATCA.

To ensure compliance with ZATCA regulations, Wafeq offers clear and detailed guidance on these prohibited functions. Wafeq aids businesses in understanding these restrictions and in implementing systems and practices that prevent these functions from occurring. This includes the selection and use of compliant software and systems, understanding the necessary details for each e-invoice, and ensuring that all legally required invoices are issued.

Wafeq also provides support through training and resources that help businesses better understand and abide by the e-invoicing regulations. Through this support, Wafeq aims to make it easier for businesses to maintain compliance, avoid potential penalties, and foster a transparent and efficient e-invoicing environment.

Read more about VAT returns in the Kingdom of Saudi Arabia. 

Conclusion: Wafeq and the Future of E-Invoicing

In the course of this article, we have explored the technical and procedural complexities inherent in the second phase of e-invoicing as initiated by ZATCA in Saudi Arabia. Central to navigating these complexities and reaping the numerous benefits of this transition is the pivotal role played by Wafeq.

The benefits of the second phase of e-invoicing include streamlined business operations, improved compliance, cost savings, and increased business opportunities. Through its innovative solutions, Wafeq has proven to be a crucial partner in ensuring that businesses fully leverage these advantages while maintaining stringent compliance with ZATCA regulations.

As the digital economy of Saudi Arabia continues to evolve, Wafeq's commitment to supporting businesses in this transition remains steadfast. By providing comprehensive technical support, guiding businesses through prohibited functions, and offering continuous training and resources, Wafeq empowers businesses to confidently navigate the e-invoicing landscape.

With an eye on the future, Wafeq is dedicated to further enhancing its services and solutions to meet the ever-evolving needs of businesses in this new digital era. Their unwavering support underscores their central role in the future of e-invoicing in Saudi Arabia and beyond.