Phase 1 changes in e-invoicing in Saudi Arabia

How is invoicing changing as of the 4th of December, 2021?

1. All persons subject to e-invoicing must use e-invoicing compliant electronic solutions for the generation of e-invoices.
2. E-invoicing must include the minimum additional fields mentioned in question 2.
3. E-invoices should have QR codes.
4. E-invoicing compliant systems must forbid the prohibited functions determined by the ZATCA. (See question 7)
5. Simplified tax invoices, usually issued for B2C transactions must have a QR code.
6. Tax invoices, usually issued for B2B transactions must have the buyer’s VAT number if he/she is VAT-registered, however, the QR code is not mandatory in the first phase.
7. The taxpayer should keep a copy of all the issued tax invoices.

What are Phase 1 technical functionalities required for e-invoicing solutions?

1. The ability to generate different types of invoices and notes

• Simplified invoices and their associated credit or debit notes
• Tax invoices and their associated credit or debit notes

2. The format required for e-invoices and notes

• No specific format is required as long as the required data and content is present in the invoices and notes

3. The structure of e-invoices and notes as per ZATCA requirements

• Tax invoices, credit and debit notes must satisfy the technical requirements outlined by ZATCA.

4. Processing data and reinforcing security

• The ability to export e-invoices and their associated notes to an offline local archival
• E-invoices unit locks or a mechanism to record tampering evidence

5. The ability to store and archive data

• The ability to export e-invoices and their associated notes to an offline external local archival system. These files should contain a VAT registration number, the issuance date, the issuance time, and reference number

6. The generation of QR codes for simplified invoices and associated notes

• The seller’s name
• The seller’s VAT registration number
• The timestamp of the simplified invoice or debit/credit note (date/time)
• The total amount including the VAT amount
• The VAT total

What are prohibited functions specified by the ZATCA for e-invoicing compliant systems in phase 1?

• Uncontrolled access
• A lack of user management leading to anonymous access,
• Absence of user session management
• Ability to operate with a default password.
• Tampering with the information:
• Deletion or modification of e-invoices or their notes and logs
• The generation of inaccurate time stamps
• Non-sequential log generation
• Resetting the electronic invoice counter.
• Multiple Electronic Invoice sequence:
• Allowing the ability to generate more than one electronic invoice sequence at any given time.

Do my electronic invoices have to be approved by ZATCA or a 3rd party in Phase 1?

Taxpayers are not required to have their electronic invoices approved by the ZATCA for phase 1.