This blog was last updated on February 19, 2024

The Zakat, Tax and Customs Authority (ZATCA) announced the finalized rules for the Saudi Arabia e-invoicing system earlier this year, announcing plans for two main phases for the new e-invoicing system.

The first phase of the Saudi Arabia e-invoicing system is set to go live from 4 December 2021.

With the mandate just around the corner, we’ve highlighted the latest news on a reform that is still evolving.

The Detailed Guidelines

The latest documentation communicated on the requirements was the Detailed Guidelines, published in August 2021. The Detailed Guidelines provided clarity on the following topics:

• Even though tax invoices must be generated electronically, they can be shared by sellers to buyers in an agreed format. For the first phase, the agreed format to exchange invoices may be electronic, human readable format, or a paper format. However, in the second phase, only XML format or PDF/A-3 with an embedded XML can be used to exchange e-invoices. In case the human readable format is used, it must be in Arabic (in addition to any other language) and Arabic or Hindi numerals can be used.
• A printed copy of the simplified tax invoice must be provided to the buyers, however, and based on mutual agreement between the seller and buyer, the invoice can be shared electronically or through any other way where the buyer can read it.
• The e-invoices generated by a third party will contain an electronic mark indicating this fact. This marker will be generated automatically and will not be visible on the human readable version of the e-invoice. The human readable format of the invoice must contain a statement declaring that the invoice is a third-party billing invoice.
• For the second phase, specific integration requirements will be published in the future.

Overview of readiness for the first phase

The first phase requirements are not as complex as the second phase requirements that will be enforced from 1 January 2023.

The ZATCA has been successful in providing taxpayers with the necessary information. The go live date is set to go ahead as planned and a delay is not currently expected.