What is e-invoicing in Saudi Arabia?

What is e-invoicing?

E-invoicing requires KSA resident taxpayers to convert their manual handwritten invoices and notes into an electronic format allowing the exchange and processing of electronic invoices and notes between vendors and buyers in an organized electronic system.

What is an electronic invoice?

An electronic invoice is issued, edited, sent, processed, and stored electronically through an electronic e-invoicing solution that is compliant with the ZATCA’s requirements.

Any scanned or handwritten invoice is not an e-invoice and will not be accepted by the ZATCA.

There are two types of tax invoices:

• “Standard” tax e-invoices: Usually issued for B2B transactions
• Simplified tax e-invoices: Usually issued for B2C transactions

Who does e-invoicing apply to?

All VAT-registered persons and parties issuing tax invoices on behalf of suppliers are required to issue e-invoices.

Non-resident VAT-registered persons are excluded.

When should e-invoicing be implemented?

The implementation of e-invoicing will take place in 2 phases in the KSA:

• Phase 1: Also called the Generation phase begins on December 4th, 2021
• Phase 2: Called the Integration phase starting from January 1st, 2023. Tax-payers will get notified by the ZATCA on the date of their integration 6 months prior.