Saudi Arabia leads the way to continuous transaction controls in the Gulf
Saudi Arabia will introduce an e-invoicing regime in a phased approach starting in December 2021. Having only introduced VAT on 1 January 2018, the country is leading the way in digitizing tax compliance in the Gulf Region.
The finalised rules published by Saudi Arabia’s tax authority, Zakat, Tax and Customs Authority (ZATCA) confirm the go-live date of the second phase from 1 January 2023.
In addition to other requirements, phase two also introduces integration with a digital ZATCA platform for continuous transaction controls (CTCs), requiring taxpayers to clear invoices ahead of transmission to buyers.
Phase 1 – Mandatory e-invoicing generation with post audit controls: Starts on 4 December 2021
Phase 2 – CTC regime: Starts on 1 January 2023 requiring taxpayers to transmit e-invoices in addition to electronic notes to the tax authority, ZATCA, for clearance.
Phase 1: 4 December 2021 – all resident taxable persons in the Kingdom to generate, amend and store e-invoices and electronic notes (credit and debit notes).
Phase 2: 1 January 2023 – additional requirements for taxable persons to transmit e-invoices as well as electronic notes to the ZATCA. This will be a phased adoption starting with larger companies with gradually more coming into scope of the mandate. Companies can expect six months’ notice ahead of the deadline by which they must comply.
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