E-Invoicing in The Kingdom of Sauid Arabia is mandatory. Now e-Invoicing is in integration phase and integration process done via ZATCA platform. The Zakat, Tax and Custom Authority has notified the taxpayers for integration process starting by 1st of January 2023.
The e-invoicing process, known as FATOORAH, is applicable to not only the taxable persons who are residents in Saudi Arabia but also to their customers or any third parties who issue a tax invoice on their behalf.
The obligation to send e-invoices applies to all taxable persons subject to VAT, except for non-resident taxpayers, as well as third parties who issue tax invoices on behalf of a taxable person.
The Integration phase of the e-invoicing process is centered around the transmission of electronic invoices and its seamless integration with the ZATCA. After an e-invoice has been cleared by the authority, suppliers are permitted to share the invoice or associated note with their customers. The electronic invoices must be generated in either XML or PDF/A-3 format, with embedded XML. In addition, each invoice is required to have a unique identifier (UUID), cryptographic stamp, hash, and QR codes. While simplified e-invoices may be shared directly with the customer, it is mandatory to report these invoices within 24 hours of their generation.
Standard E-Invioce Flow
Below image shows the flow of standard e-Invoice clearence.
Simplified E-Invoice Flow
Below picture shows the simplified invoice and reporting.
S4FN Solution for ZATCA integration in SAP
S4FN has developed an Add-On solution for SAP environment which can directly submit the XML structures to ZATCA API.