Everything You Need to Know About the Simplified Tax Invoice

The e-invoicing system has become an integral part of the business environment in Saudi Arabia. Among the innovative systems aimed at achieving tax compliance and enhancing transparency, the simplified tax invoice stands out as an ideal solution for organizing transactions between merchants and consumers.

In this article, we will detail the concept of the simplified tax invoice, its advantages, key components, issuance steps, and how to comply with the regulations set by the Zakat, Tax, and Customs Authority (ZATCA).

What is a Simplified Tax Invoice?

A simplified tax invoice is a type of invoice launched by ZATCA as part of Saudi Arabia’s e-invoicing system.

This invoice is used to document transactions involving the sale of goods and services between commercial entities and individual consumers (B2C). It is designed to be simple and clear, making it suitable for daily transactions with low monetary values.

The primary goal of the simplified tax invoice is to ensure accurate transaction records, promote transparency between merchants and consumers, and comply with VAT regulations, reporting these transactions to ZATCA seamlessly.

Is the Simplified Tax Invoice Mandatory?

The simplified tax invoice is mandatory in Saudi Arabia under the following conditions:

1. When Selling to the Final Consumer: Issued in transactions between businesses and individual consumers (B2C).

2. For Low-Value Transactions: Used for transactions that do not exceed 1,000 SAR.

3. For VAT-Registered Merchants: VAT-registered merchants must issue this invoice when selling goods or services to individuals.

Key Advantages of the Simplified Tax Invoice

– Clarity and Simplicity: The invoice contains only essential details, making it easy to use and understand.

Digital Integration: It is issued using electronic systems that comply with ZATCA’s requirements, improving efficiency.

– Enhanced Transparency: Ensures accurate recording and timely reporting to ZATCA.

– Reduced Tax Risks: Minimizes the chances of errors and ensures compliance with regulations.

Components of a Simplified Tax Invoice

To ensure full compliance, a simplified tax invoice must include the following fields:

1. Invoice Title: “Simplified Tax Invoice.”

2. Invoice Number: A serial number distinguishing each invoice.

3. Date and Time of Issuance: Clearly formatted as (YYYY-MM-DD).

4. Store Name and Address: Information of the issuing entity.

5. VAT Registration Number: A number proving the entity’s registration with ZATCA.

6. Details of Products or Services: Includes quantity, unit price, and VAT for each item.

7. Total Amount Including Tax: Shows the total after VAT is applied.

8. QR Code: Allows consumers to easily access the invoice details.

Also read: The Importance of QR Code in E Invoice in Saudi Arabia

Steps for Issuing a Simplified Tax Invoice

The process of issuing a simplified tax invoice in Saudi Arabia involves the following steps:

1. Use a Compliant System: The system must be approved by ZATCA.

2. Issue the Invoice: Include all required components listed above.

3. Deliver to the Consumer: The invoice can be delivered either in printed or electronic format.

4. Store the Invoice: Keep an electronic copy in the company’s system.

5. Send the Invoice to ZATCA: Share the invoice with ZATCA via the “FATOORA” platform in XML format within 24 hours.

Also read: Your Simplified Guide to Sending E-Invoices to Customers

Importance of the Simplified Tax Invoice

The simplified tax invoice is not just a legal requirement; it is a powerful tool to improve business efficiency and enhance transparency between merchants and consumers. Key benefits include:

1. Ensuring Tax Compliance: Complying with ZATCA’s requirements and avoiding financial penalties.

2. Building Customer Trust: Providing a formal, reliable document that reflects professionalism.

3. Improved Tax Reporting: Simplifies transaction reporting and enhances tax management efficiency.

Why You Need EZ Integrated E-Invoicing Solutions

Compliance with the simplified tax invoice requirements in Saudi Arabia may seem complicated. However, with EZ Integrated’s e-invoicing solutions, it becomes simple!

We offer fully integrated e-invoicing solutions that align with ZATCA’s regulations, ensuring you:

– Easy Invoice Generation: Fast and compliant system for generating invoices.

– Seamless and Secure Integration: Direct integration with the “FATOORA” platform for smooth data exchange.

– Reduced Risks: Avoid errors and financial penalties.

Contact us now for a free consultation, and let us help you achieve full compliance in just 3 days!