The Kingdom of Saudi Arabia (KSA) is advancing its digital transformation by implementing e-invoicing under the guidance of the Zakat, Tax, and Customs Authority (ZATCA). This initiative aligns with Saudi Vision 2030, enhancing transparency, compliance, and operational efficiency.
What is E-Invoicing?
E-invoicing, commonly known as Fatoorah, is the digital process of generating, storing, and sharing invoices electronically. It replaces traditional paper invoices, enabling seamless exchange of tax invoices, credit notes, and debit notes between buyers and sellers.
Why Was E-Invoicing Introduced?
The primary objectives of e-invoicing in KSA include:
- Improving tax compliance and minimizing fraud.
- Enhancing transparency in business transactions.
- Streamlining business operations through digital integration.
- Enabling real-time transaction tracking for audits.
Types of E-Invoices
ZATCA classifies e-invoices into two types:
- Standard Tax Invoice: Issued in B2B transactions, including VAT details.
- Simplified Tax Invoice: Used in B2C transactions with minimal details.
Invoices must be in Arabic, with optional additional languages.
Phases of E-Invoicing
- Generation Phase (Phase 1):
- Effective from December 4, 2021.
- Businesses must generate and store e-invoices using compliant systems.
- Integration Phase (Phase 2):
- Started on January 1, 2023.
- Businesses are gradually required to integrate their ERP/POS systems with the Fatoora portal in waves based on revenue.
| Name of the Wave |
|
Turnover of Which Year? | VAT Turnover |
|---|---|---|---|
| Wave 1 | 1st January 2023 | 2021 | Above SAR 3 billion |
| Wave 2 | 1st July 2023 | 2021 | Above SAR 500 million and below SAR 3 billion |
| Wave 3 | 1st October 2023 | 2021 or 2022 | Above SAR 250 million and below SAR 500 million |
| Wave 4 | 1st November 2023 | 2021 or 2022 | Above SAR 150 million and below SAR 250 million |
| Wave 5 | 1st December 2023 | 2021 or 2022 | Above SAR 100 million and below SAR 150 million |
| Wave 6 | 1st January 2024 | 2021 or 2022 | Above SAR 70 million and below SAR 100 million |
| Wave 7 | 1st February 2024 | 2021 or 2022 | Above SAR 50 million and below SAR 70 million |
| Wave 8 | 1st March 2024 | 2021 or 2022 | Above SAR 40 million and below SAR 50 million |
| Wave 9 | 1st June 2024 | 2021 or 2022 | Above SAR 30 million and below SAR 40 million |
| Wave 10 | 1st October 2024 | 2022 or 2023 | Above SAR 25 million and below SAR 30 million |
| Wave 11 | 1st November 2024 | 2022 or 2023 | Above SAR 15 million and below SAR 25 million |
| Wave 12 | 1st December 2024 | 2022 or 2023 | Above SAR 10 million and below SAR 15 million |
| Wave 13 | 1st January 2024 | 2022 or 2023 | Above SAR 7 million and below SAR 10 million |
All VAT-registered businesses in KSA must adopt e-invoicing, excluding non-resident taxpayers.
How Tax2Gov Supports Businesses
Tax2Gov offers cutting-edge solutions to help businesses seamlessly generate, validate, and integrate e-invoices in compliance with ZATCA regulations. Our expert team ensures that businesses transition smoothly to e-invoicing without disruptions.
