Following prior public consultations, The Zakat, Tax and Custom Authority, formerly GAZT, has announced final inspection requirements, procedural rules and technical specifications related to e-invoicing. They have been in force since December 4, 2021, and the second, integrative stage of e-invoicing began on January 1, 2023.
The e-invoicing process called FATOORAH applies to taxable persons who are residents in the Kingdom of Saudi Arabia, as well to the customers or any third parties who issue a tax invoice on behalf of a taxable person who is a resident in the Kingdom according to the VAT Implementing Regulation.
All taxable persons (excluding non-resident taxpayers) and third parties issuing tax invoices on behalf of a taxpayer that is subject to VAT are obliged to send e-Invoices.
It is required to implement security measures in the form of an electronic seal, which is created using cryptographic algorithms.
Starting with the Integration phase, the invoice must be in XML format in order to be shared with the authority using the API for clearance and reporting.
Electronic invoices may be stored in a server on-premises in the KSA or in the cloud according to the provisions in VAT Law, VAT Implementing Regulation, E-Invoicing Regulation and resolutions and all other relevant Laws in KSA.
We have 20+ years of experience in carrying out various EDI, e-invoicing, and other document exchange projects around the world. In those years, we have successfully connected more than 130,000 entities from over 60 countries.
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For the generation phase (December 4th 2021), there is no specific format required to generate and store the e-Invoices. Starting with the Integration phase, the invoice must be in XML format in order to be shared with the authority using the API for clearance and reporting.
ESAL is a national platform for e-invoicing exchange in Saudi Arabia.
The supplier is responsible for the accuracy of the invoices issued, and for implementing security measures and adequate controls to prevent tampering with records stored electronically. It can be done by an electronic stamp which is created via cryptographic algorithms.
Persons subject to the E-Invoicing Regulation may store their electronic invoices in a server on-premises in the KSA or in the cloud as per their solution requirements and storage requirements, and according to the provisions in VAT Law, VAT Implementing Regulation, E-Invoicing Regulation and resolutions and all other relevant Laws in KSA.
E-invoicing has been obligatory in Saudi Arabia since December 4th, 2021.
All taxable persons (excluding non-resident taxpayers) and third parties issuing tax invoices on behalf of a taxpayer that is subject to VAT are obliged to send e-Invoices.