ZATCA Sets Criteria for Tenth Wave of Taxpayers in E-Invoicing Integration Phase



The Zakat, Tax and Customs Authority (ZATCA) has recently delineated the selection criteria for taxpayers targeted in the tenth wave of the E-invoicing initiative's "Integration Phase." This move comes as part of the Authority's ongoing efforts to foster a digital transformation within the Kingdom's economic landscape. Specifically, this wave will include all taxpayers whose revenues subject to VAT exceeded 25 million Saudi Riyals during either 2022 or 2023.

To streamline the transition, ZATCA has announced that it will commence notifications to all pertinent taxpayers in the tenth wave. These notifications will instruct them to integrate their electronic invoicing solutions with the FATOORA platform starting from October 1, 2024. This directive underscores the Authority’s commitment to enhancing the efficiency and transparency of tax collection processes through digital means.

The integration phase, or Phase Two of the e-invoicing initiative, is characterized by additional requirements not present in the initial Generation Phase. Among the most critical of these is the integration of taxpayers' e-invoicing systems with the FATOORA platform maintained by ZATCA. This phase also mandates the issuance of electronic invoices adhering to a specific format and the inclusion of additional fields within each invoice. ZATCA plans to implement this phase in a staggered approach, informing subsequent groups of taxpayers at least six months in advance of their scheduled integration date.

The initiation of Phase Two is a testament to the Kingdom's broader goals of economic development and digital transformation. It builds on the success of the e-invoicing project's Phase One, which was launched on December 4, 2021. The primary phase has been lauded for its positive impacts, notably in enhancing consumer protection across the Kingdom. Additionally, the Authority has recognized the high level of awareness among taxpayers and their swift compliance with the Generation Phase requirements.

Phase One marked a pivotal shift from traditional invoicing methods, mandating the cessation of handwritten and computer-generated invoices created through basic text editing or spreadsheet software. It also set forth standards for an e-invoicing technical solution that aligns with ZATCA’s stipulated requirements, including the generation and storage of electronic invoices that feature all necessary fields, such as QR codes.

As Saudi Arabia continues to navigate its journey toward comprehensive digitalization, the roll-out of the E-invoicing Integration Phase represents a crucial step forward. By setting clear criteria for taxpayer inclusion and emphasizing the importance of advanced electronic invoicing systems, ZATCA is paving the way for a more digitally adept and economically robust future.