e-Invoicing guidelines for Retailers in Saudi Arabia

Under the Vision 2030 , massive transformation is taking place in the Saudi Arabia. Vision 2030 is a blueprint to diversifying the economy, empowering citizens, creating a vibrant environment for both local and international investors, and establishing Saudi Arabia as a global leader.

One of the pillars of Vision 2030 is “A Thriving Economy”, which envisions equal opportunities for everyone to succeed, including businesses of all sizes by creating business supportive environment in Saudi Arabia.

Retailers across globe are invited to be part of this grand journey, supported to establish their businesses, and encouraged to open their Brand outlets in the Kingdom of Saudi Arabia.

Business Establishment:

Retailers and businesses can follow this link where guidelines are provided for all kinds of business establishment activities:

Guide to setup a business in KSA

VAT Guide:

Value Added Tax (VAT) ?was introduced in the KSA on 1 January 2018. It is mandatory for businesses to?Register for VAT ?in the following three cases:

1. VAT registration threshold for domestic established sellers: if the total amount of taxable supplies exceeds SAR 375,000 in the past 12 consecutive months or is expected to exceed this amount in the next 12 months
2. VAT registration threshold for non-established sellers: No threshold
3. VAT registration threshold for non-resident suppliers of Digital Services: No threshold

TAX Invoice:

A?tax invoice?should be issued in Arabic (in addition to any other language shown on the invoice) and should include the following information:

Document & general transaction information:

1. The invoice issuance date
2. Unique invoice sequential number
3. Date of performance (if it differs from the invoice issuance date)

Supplier information:

1. Name, address, and Tax ID number

Customer information:

1. Name and address
2. If the customer is required to assess and report the VAT, the Customer’s tax ID number and a statement on this requirement

Financial transaction information:

1. The quantity and nature of the goods supplied, or the scope and nature of the services rendered
2. The taxable amount per rate or exemption, the unit price exclusive of VAT, and any discounts or rebates if they are not included in the unit prices
3. VAT rate
4. The amount of VAT payable in SAR

Additional information that may be required:

1. In cases where VAT is not charged at the standard rate, the invoice shall include an explanation of the tax treatment applied to the supply; and
2. In cases where the profit margin method for Eligible Used Goods is applied, reference to the fact that VAT is charged on the profit on those Eligible Used Goods.

The tax invoice should be issued no later than the fifteenth day of the month following the month in which the supply took place. A tax invoice is usually issued for B2B and B2G transactions. This type of document is used for claiming?input VAT?deduction by buyers.

In Phase 1 - at the Generation Phase - from December 3, 2021, until December 31, 2023, no specific format is required to issue an invoice.

From the beginning of Phase 2 - at the Integration Phase -, which starts on January 1, 2023, XML format or PDF/A-3 format is mandatory.

A?simplified tax invoice?is generally issued for B2C transactions. However, a taxpayer may issue a simplified tax invoice in a B2B transaction if the value of taxable supply is less than 1,000 SAR (approximately EUR 250).

A simplified tax invoice should include the following information:

1. The invoice issuance date;
2. The name, address, and tax ID number of the supplier;
3. A description of the goods and services supplied;
4. The consideration payable for the goods and services;
5. The tax payable or a statement that the consideration is inclusive of tax in respect of the supply of the goods or services.

The simplified tax invoice shall be issued at the date of performance or the date of receipt of consideration, whatever comes earlier. If the simplified tax invoice contains the customer’s name, address, and date of performance, the simplified tax invoice should be issued no later than the fifteenth day of the month following the month in which the supply took place.

Electronic?Credit & Debit notes?are issued after the issuance of Tax Invoices and Simplified Tax Invoices, wherein the transaction is adjusted. Credit and Debit notes should include a reference to the original invoice(s) to which they are issued.

Guidelines for Tax Invoices

e-Invoicing for Retailers

Electronic Invoicing is a procedure that aims to convert the issuing of paper invoices as well as credit and debit notes into an electronic process that allows the exchange and processing of invoices, credit, and debit notes in a structured electronic format between the buyer and seller.

The E-Invoicing Regulation shall be read together with the Unified VAT Agreement (the Agreement), the VAT Law published on 4/11/1438H and its amendments (the VAT Law), the VAT Implementing Regulation (VAT Implementing Regulation) and the resolutions issued pursuant to the Electronic Invoicing Regulation, including the resolution on the Controls, Requirements, Technical Specifications and Procedural Rules (herein after referred to as “E-Invoicing Resolution”) required for implementing Electronic Invoicing in the Kingdom of Saudi Arabia.

Electronic Invoicing is composed of two main phases: -

Phase 1 (Generation Phase) - Effective since 4th of December 2021 (Applicable to All VAT taxpayers)

Phase 2 (Integration Phase) -?Effective since 1st of January 2023 (Applicable based on periodic announcements)

As per the latest?announcement (Integration Wave10), the second phase will be applicable if taxpayers annual revenue is above 25million SAR in 2022 or 2023.?

1. Simplified Tax Invoices (Sales Receipt) for B2C transaction can be generated for any value
2. Simplified Tax Invoices (Sales Receipt) for B2B transaction can be generated if the value of Taxable Supplies is less than 1,000 SAR

Retailers in Saudi Arabia must comply with the following legal obligations under ZATCA's e-invoicing regulations:

1. E-Invoice Generation: Issue electronic invoices for all taxable transactions.
2. Mandatory Fields: Include all required fields, such as VAT number, date, and total amount.
3. Format Compliance: Ensure invoices meet ZATCA’s format and content specifications.
4. Storage: Securely store e-invoices for at least six years.
5. Integration: Integrate with ZATCA’s systems for real-time reporting.
6. QR Codes: Include QR codes on invoices for validation.
7. Authentication: Use cryptographic stamps to validate invoices.
8. Regular Updates: Keep systems updated to comply with evolving ZATCA regulations.

e-Invoicing Portal

Registration Portal

e-Invoicing Guide

Simplified Guide

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Credit:

1.???? Vision 2030 Portal

2.???? ZATCA Portal

3.???? Saudi Business Center

4.???? FONOA Saudi Arabia

For UAE guide, open this link : Simplified guide for Retailers in UAE