The Implementation Phases of e-Invoicing in Saudi Arabia
The electronic invoicing (e-invoicing) system was introduced in Saudi Arabia by ZATCA on December 4th, 2021, through the release of electronic invoicing regulations. The implementation of e-invoicing is divided into two phases: Phase 1 and Phase 2.
Phase 1 - Effective from December 4th, 2021
Phase 1 which commenced on December 4th, 2021, requires taxpayers to generate and store tax invoices, simplified tax invoices, and their respective credit and debit notes (CDNs) using compliant e-Invoicing Generation Solutions (EGS). In this phase, taxpayers are expected to utilize approved e-invoicing systems for their invoicing processes.
Phase 2 - Effective from January 1st, 2023
Phase 2 scheduled to commence on January 1st, 2023, will mandate the integration of taxpayers' systems with ZATCA. This integration will enable the transmission of e-invoices and related CDNs directly to ZATCA. Additionally, taxpayers will be required to share these e-invoices and CDNs with ZATCA as part of the compliance process. The specific criteria for resident taxpayers and their effective dates in Phase 2 will be communicated by ZATCA. The earliest effective date for Phase 2 implementation is January 1st, 2023.
By implementing these phased approaches, ZATCA aims to ensure a smooth and structured transition to e-invoicing in Saudi Arabia, allowing taxpayers to adapt to the new system while complying with the established requirements.