Mandatory e-Invoicing in the Kingdom of Saudi Arabia

KSA became part of the e‑Invoicing Revolution

- What does it mean, exactly?

Following prior public consultations, the Tax and Customs Office (ZATCA), formerly GAZT, has announced final inspection requirements,  procedural rules and technical specifications related to e-invoicing. They apply from December 4, 2021 and assume the implementation of the second (integration) stage of e-invoicing in Saudi Arabia 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.

Implementation timeline graphic

Who is obliged to use e-Invoicing

Who is obliged to use e-Invoicing in Saudi Arabia

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.

E-invoicing process description

E-invoicing generation phase
  • No e-invoicing format is required, as long as all required fields are included in invoices and notes - buyer's NIP (if the buyer is a registered VAT payer) and QR code (which is mandatory only for simplified VAT invoices)
  • Ability to generate tax invoices and simplified tax invoices in electronic, structured format, and to store compliant e-invoices electronically.
Integration phase
  • Focuses on transmission of e-invoices and its integration with ZATCA
  • Once an e-invoice is cleared by the authority, suppliers can share the invoice or associated note with the customers.
  • Required electronic invoices to be generated in XML or PDF/A-3 (with embedded XML) format
  • Required unique identifier (UUID), cryptographic stamp, hash and QR codes
  • Simplified e-invoices may be shared directly with the customer while reporting of such invoices should happen within 24 hours of generation
Next phase
  • Taxpayers notified by ZATCA on the date of their integration at least six months in advance, starting from  January 1st 2023

Archiving requirements for e-invoicing in Saudi Arabia

Archiving requirements for e-invoicing in Saudi Arabia

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.

How integrity and authenticity may be ensured?

How integrity and authenticity may be ensured?

It is required to implement security measures in the form of an electronic seal, which is created using cryptographic algorithms.

What is the required format of an e-Invoice

What is the required format of an e-Invoice

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.

Why is Comarch the best choice?

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.

  • 1. Legal compliance

    Full compliance with the latest data exchange regulations and modern data transfer standards

  • 2. Digitization

    Applying new technologies and IT solutions in order to streamline workflows and automate activities and procedures

  • 3. Individual approach

    Tailor-made solutions based on processes specific to each company – own road map and a suitable pace of changes

  • 4.Security

    Highest level of security for all sensitive and important company data

    What are the benefits?

    • Fast & secure data exchange
    • Reduced number of incorrect/incomplete documents
    • Low operational costs
    • On-time payments
    • Positive impact on the environment (CSR)
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    As a global provider of innovative IT products and services, Comarch is committed to fostering corporate social responsibility.

    Our company helps reduce the impact of climate change by developing IT solutions - such as Comarch e-Invoicing - that can both improve your business performance and contribute to environmental sustainability.

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    Comarch continues to grow in the key sectors of the economy, including retail, finance, telecommunications, banking and insurance, public administration, and healthcare.

    The company has recently expanded its global footprint by entering the GCC region, providing our products and services in countries such as the Kingdom of Saudi Arabia, the United Arab Emirates, Qatar, Oman, Bahrain, and Kuwait.

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    Check out some of our success stories to learn what our clients have achieved by using Comarch EDI, MDM, e-Invoicing (also in a Cloud), and Online Distribution.

    Legal regulation changes in Saudi Arabia

    Characteristics of the e-invoicing in Saudi Arabia

    • B2B e-invoicing and simplified e-invoicing (usually used in B2C) has been mandatory since December 4th 2021.
    • The second phase (integration) starts as of January 1st 2023.

    E-invoice format and platform

    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.

    E-invoicing process description

    • The first phase of implementation requires companies to be able to generate tax invoices and simplified tax invoices in electronic, structured format, and to store compliant e-invoices electronically.
    • Second, the integration phase focuses on the transmission of e-invoices. Once an e-invoice is cleared by the authority, suppliers can share the invoice or associated note with the customers.
    • Simplified e-invoices may be shared directly with the customer while reporting of such invoices should happen within 24 hours of generation.

    Integrity and authenticity

    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.

    Archiving

    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.

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