Saudi Arabia E-Invoicing Compliance: Making Waves

Phased Implementation: The e-invoicing mandate, overseen by the Saudi Arabian Zakat, Tax and Customs Authority (GAZT), began in December 2021 and is being implemented in phases. Phase 1 requires all resident taxpayers to generate and store e-invoices, while Phase 2, starting January 2023, mandates transmission of e-invoices to the FATOORA platform for pre-clearance, beginning with larger companies and progressively including smaller entities.
E-invoice Requirements: All invoices must be generated in XML format or PDF/A-3 with embedded XML data, and must include specific identifiers like UUIDs and hash values. Real-time or near real-time clearance of e-invoices is required, and data must be transmitted automatically to FATOORA with minimal human intervention. Additionally, all data fields must be submitted in Arabic, which may pose challenges for international businesses.
Compliance Penalties: Non-compliance with the e-invoicing regulations can result in cumulative penalties ranging from SAR 5,000 to SAR 50,000 per instance. Early compliance is crucial to avoid these penalties, as further developments and additional waves of implementation for smaller businesses are anticipated in the coming years.

Source VATit

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