Saudi Arabia E-invoicing phase one | Preparing your business with ERPNext

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How to get ready for Saudi Arabia E-invoicing phase one?

​RECAP OF PHASE 1 REQUIREMENTS For December 4th​, 2021, taxpayers should:

1. Stop issuing manual invoices

handwritten invoices and invoices written using text editing tools are not considered e-invoices

2. Use a compliant electronic invoicing solution

e-invoicing solutions must comply with the requirements and specifications published under the e-invoicing laws and regulations and can be summarized for Phase 1 as follows:

 Ability to generate e-invoices with the required elements including QR codes

 Ability to timestamp the e-invoice copies archived in the solution

 Absence of prohibited functionalities:

Uncontrolled access

Software time change

Tampering of e-invoices or logs

Multiple invoice sequences

3. Ensure invoices include the required additional fields

Tax Invoices:

The VAT registration number of the buyer if the buyer is a registered VAT taxpayer in addition to the                    invoice type Description as a title. QR code can be added (Optional)

Simplified Tax Invoices:

A mandatory QR code generated by the taxpayer’s E-Invoicing solution based on ZATCA’s specifications, in addition    to the invoice type Description as a title. 

Saudi Arabia E-invoicing phase one READINESS STEPS

Businesses are recommended to follow the 4 steps below to ensure timely readiness for e-invoicing:

Understand e-invoicing requirements

familiarize yourself with e-invoicing leveraging the materials available on this website

Using a complaint solution based with the E-Invoicing requirements​

Taxpayers can approach a solution provider or their internal technical teams to acquire or upgrade to a compliant solution.​

Test your e-invoicing solution

test your e-invoicing solution before 4 December 2021 to ensure invoices are issued correctly

Ensure your staff is ready

create awareness amongst your staff and ensure relevant staff is familiar with your e-invoicing solutions​​​

Saudi Arabia E-invoicing phase one FAQ

- All Persons subject to the E-Invoicing Regulation must use compliant electronic systems to generate invoices starting from December 4th, 2021. Manual invoices will no longer be considered as compliant invoices.

- E-invoices must include the minimum additional fields (see next question)

- E-invoicing compliant electronic systems should be able to generate QR codes.

- E-invoicing compliant electronic systems must not allow for the prohibited functions specified by ZATCA.

- Please approach your solution provider or your internal technical teams to ensure your electronic systems are compliant with ZATCA requirements. In addition, developers and subject matter experts may visit ZATCA’s website for viewing all requirements (business, technical, security, etc.).

- E-invoices for Phase 1 (4 December 2021) are similar to current invoices, with minimum  additional fields: 

   a. For simplified tax invoices and their associated notes (usually issued for B2C transactions) a mandatory QR code.

   b.For tax invoices and their associated notes (usually issued for B2B transactions), an optional QR code and mandatory VAT number of the buyer if the buyer is a registered VAT taxpayer.

- There is no specific file format mandated for Phase 1, however, invoices must include the mandatory fields and must be issued from an electronic system meeting ZATCA’s requirements. In addition, electronic copies of all issued invoices must be stored by the taxpayer.

​Yes, the system or solution used for generating and storing the invoices must be able to have an internet connectivity for both phases.​

No, integration with ZATCA is not required for Phase One starting December 4, 2021.​​

Yes, QR code are mandatory for simplified tax invoices (usually issued for B2C transactions) and optionally for tax invoices (usually issued for B2B transactions). QR code is not provided by ZATCA and shall be generated by the electronic system. Please approach your solution provider or technical teams to acquire or upgrade to a compliant electronic systems.​​

As part of Phase 1 (Generation Phase), the below fields are the minimum required fields that must be shown after scanning a QR code in a simplified tax invoice:

- Seller’s name

- VAT registration number of the seller

- Time stamp of the Electronic Invoice or Credit/Debit Note (date and time)

- Electronic Invoice or Credit/Debit Note total (with VAT)

- VAT total

​No, for Phase 1 (December 4, 2021), taxpayers are not required to approve, clear or report invoices to ZATCA.​​

- Lack of user management capabilities (uncontrolled access) for example:

    Anonymous Access

    Absence of user session management

- Tampering of e-invoices or their associated notes or logs

- Multiple Electronic Invoice sequences

- For additional details on the prohibited functionalities, please refer to Annex (1) “Technical Requirements of E-invoice Generation Solutions” in the resolution.

 - Phase 1 known as the Generation phase will require taxpayers to generate and store compliant tax invoices and notes using compliant electronic systems.

 - Phase 1 is enforceable as of December 4th, 2021 for all Persons subject to the E-Invoicing Regulation.

Preparing your business for Saudi Arabia E-invoicing phase1

E-invoicing preparing your business phase one with ERPNext