E-invoicing software is a must-have for every organization in KSA. It is a standard requirement implied by Zakat, Tax, and Customs Authority (ZATCA) and should be followed by everyone. This requirement is imposed on businesses to have streamlined procedures and efficient working.

Shabakah helps you integrate fully compliant software in your organization, fulfilling all the strict regulations of Zakat, Tax, and Custom Authority (ZATCA). Whether it be your accounting software, sales, or purchase, it is pre-integrated with other software, so you don’t have to hustle for that. Incorporate Shabakah’s E-invoicing software in your organization to escalate the growth of your working operations and handle taxes in an authentic and organized way.

The ZATCA compliant Fatoorah E-invoicing system holds two types of invoices:

• Standard invoice.
• Simplified invoice.

Standard Invoice:
Well, the standard invoice which is also known as tax invoice, is mainly issued for B2B business and B2G transactions. The type of invoice is utilized for demanding vat input deduction by buyers.

It has to be very clear to the buyer that in phase 1 these invoices can be shared in a given format with the buyer however in phase 2 these invoices could be shared after being evident by ZATCA and cryptographically stamped. Also, the VAT registration number should be added to the invoice if the buyer is VAT registered.

Simplified Invoice:
A simplified invoice is issued to B2C transactions only with the QR code generated from your system. The buyer doesn’t need to hustle manually. However, the QR code is an essential factor to differentiate your invoice from others. These invoices can also be self-billed, but the system will indicate this on the invoice.

There are two phases in which you can enforce an electronic invoicing system in your organization.

Phase 1:
Phase 1 is invoked from 4th December, 2021 and is known as the “generation Phase”.

Phase 2:
The second phase of electronic tax invoice is going to be implemented by 1 Jan, 2023. Therefore, the taxpayers will be informed at least six months before their integration phase starts.

Well, the technical requirements are mostly satisfied by the internal team members in case of in-house built solutions, or service providers (ECR vendors, or software vendors). The taxpayer needs to consult a service provider to comply with electronic invoice processing systems in their organization, or the internal team member to update and comply with the system by 4 Dec, 2021.

The specific requirements are applicable to both the phases, however differs with respect to the type of invoice.

• Use of electronic systems to generate invoices.
• QR code is a must on tax invoices.
• Invoice title. (depending on the type of invoice being generated)
• VAT number should be written on the invoice.
• Invoices in XML format.
• Safety from fraudulent attacks. (Anti-tampering feature)
• Integration with ZATCA system
• A few technical requirements (E.g. UUID)

Considerably, these requirements and phases are applied to all the people who are compliant with the VAT regulations or VAT registered.

The data being shown on a simplified tax invoice after scanning from a QR code is listed below:

• Seller’s name.
• VAT registration number of the person.
• Date and time stamp.
• VAT total.
• Electronic invoice total with VAT.

• The 1st phase deadline is Dec 4, 2021 given by Zakat, Tax & Customs Authority (ZATCA).
• The 2nd phase will be enforced by Jan 1, 2023 which will be implemented in waves.