Phase 2 of E-Invoicing in Saudi Arabia

With the formalized introduction of E-Invoicing in the Kingdom of Saudi Arabia (KSA) that came into effect on 4 December 2021, you may be aware that it has become mandatory for VAT registered businesses to shift from paper to paperless invoicing in a defined structured format mandated as part of Phase 1 (generation phase). Al Tamimi & Company has partnered with Pagero, a Smart Business Network Solution Provider that streamlines and automates the e-invoicing mandate. It ensures businesses have a compliant and secure platform that flows seamlessly through Al Tamimi’s ERP system directly to the portal of the KSA Tax Authority (also known as “ZATCA”).

Phase 2 (integration phase) of the e-invoicing is nearly upon us and will be implemented from 1 January 2023. This client alert is to notify you of what you can expect from us in the coming months.

In preparation for Phase 2, Al Tamimi & Company has requested Pagero to commence emailing the ZATCA invoice template to all our KSA clients (PDF and XML). This is mandated from 1 January 2023 but in anticipation of the upcoming phase, we will commence this process now. You can review a sample of what this invoice will look like here. ZATCA only mandates that the Tax Invoice be integrated into the ZATCA billing portal. As such, Al Tamimi & Company will also need to send clients its standard Tax Invoice, Detailed Narrative, and any other supporting documents as per our normal practice. So you will receive the same invoice number twice but only need to settle it once.

We would also like to take this opportunity to confirm that Al Tamimi & Company is 100% compliant with the new e-invoicing regulations. Phase 2 has an additional requirement for all invoices to have a QR code when it receives clearance from ZATCA.  This is currently in development and will be available by 1 January 2023.  Under Phase 1, only Simplified Tax Invoices were required to have the QR code. Al Tamimi & Company issues Standard Tax Invoices so this was not applicable until Phase 2.

We are constantly working to ensure compliance with relevant tax laws and regulations in the region, and hereby abide with the necessary conditions outlined by the government to deliver tax invoices in the prescribed format. This requirement currently extends to disclosing tax invoices in relation to your matter, however this is only to the minimum extent to the KSA Tax authorities and third parties chosen by us to assist with ZATCA E-Billing and subject to appropriate safeguards to maintain confidentiality.

Thank you for your continued support and please do not hesitate to contact us should you have any questions. The Al Tamimi & Company Tax team Shiraz Khan, Janet Gooi and Jad Khazaal, would be only too happy to assist you in your enquiry.