We are witnessing a global digital transformation boom, where the world is heading towards digitizing all financial and administrative operations. Saudi Arabia stands out as a leader in the region with the launch of ZATCA e invoicing system, keeping pace with the latest developments in accounting and invoicing, reflecting the Kingdom’s Vision 2030 to achieve a growing and sustainable economy.
In this article, we will provide an overview of the e invoicing system in Saudi Arabia, its phases, the ZATCA e invoicing requirements, and how to achieve full integration with the ZATCA system through the FATOORA portal using advanced e invoice solutions from EZ Integrated.
What is the e Invoicing System?
The e invoicing system refers to converting paper invoices and credit notes into an electronic process, allowing the issuance, storage, and exchange of structured electronic invoices between sellers and buyers.
Saudi Arabia’s Leadership in E-Invoicing
In a pioneering move both locally and globally, the Zakat, Tax and Customs Authority (ZATCA) announced the launch of the “FATOORA” e invoicing project on December 4, 2021.
The project aimed to transform the process of issuing, sending, and processing tax invoices and related credit notes into a fully electronic procedure.
Saudi Arabia is one of the first countries worldwide to adopt an e invoice system to facilitate financial and commercial transactions. This step is a result of long-term digital infrastructure planning and a well-thought-out approach to comprehensive digital transformation.
The implementation of the e invoicing system in the Kingdom directly contributes to the realization of Vision 2030 goals, accelerating the digital transformation by:
- Standardizing the internal and external verification of invoices.
- Simplifying financial processes and enhancing transparency across sectors.
- Improving operational efficiency and building a sustainable economy.
The Generation Phase and Integration Phase of e Invoicing
The implementation of e invoicing in Saudi Arabia is rolled out in two phases:
1. Generation Phase
Starting from December 4, 2021, this phase required all taxpayers subject to the e invoicing regulations to issue e invoices. These invoices are issued and stored electronically in a structured format via an electronic system and must meet the ZATCA e invoicing requirements for tax invoices.
2. Integration Phase
Beginning on January 1, 2023, this phase aims to integrate e invoicing solutions with ZATCA’s system via the FATOORA portal to ensure the issuance of invoices in the required format.
Read more: How to Prepare Your Business for ZATCA e Invoicing Phase 2?
What are the ZATCA e Invoicing Requirements?
The key ZATCA e invoicing requirements, based on ZATCA’s standards, can be summarized as follows:
- Documentation: All invoices, whether business-to-business (tax invoices) or business-to-consumer (simplified tax invoices), must be documented electronically to ensure their authenticity.
- Compliance with ZATCA Standards: This includes using XML or PDF/A3 with embedded XML formats for issuing and storing invoices. Invoices must also include all required elements, such as the QR code.
- Electronic Integration: The integration between the ZATCA system through the FATOORA portal and the system used by businesses must be ensured. This is achieved through e invoice solutions provided by approved e invoicing solution providers in Saudi Arabia. Continuous internet connection and system synchronization with ZATCA are essential.
Best e Invoice Solutions from EZ Integrated
With the ZATCA e invoicing requirements becoming mandatory, some businesses may face challenges related to the technical complexity of integrating accounting systems with the FATOORA portal.
With EZ Integrated’s e invoice solutions, there’s no need to make any changes to your existing accounting system. We provide advanced solutions that seamlessly integrate with ZATCA’s system in Saudi Arabia.
EZ Integrated is a trusted and certified ZATCA partner for both the Generation and Integration Phases, ensuring a smooth and secure transition for your business.
Contact us today for inquiries about our comprehensive solutions and receive a free consultation to overcome any technical challenges you may face.