How e invoicing KSA process works in Saudi Arabia

What is an e invoicing in KSA?

Einvoicing KSA is the process of generating invoices in a digital format, so you can issue and store them electronically as per ZATCA. The Zakat, Tax and Customs Authority (ZATCA) in the Kingdom of Saudi Arabia (KSA) has rolled out regulations mandating businesses to adopt an e invoicing in KSA process in two phases, starting on December 4, 2021.

For KSA VAT taxpayers, einvoicing KSA will resemble the VAT tax invoices that are generally issued but will be generated through an online system. Do note that a paper invoice that is copied or scanned is not considered an e-invoice.

Know more about Einvoicing software in Saudi Arabia 

Why is the KSA e invoicing by  government undergoing the transformation?

The Saudi Arabia government is implementing ksa  e invoicing for a number of reasons. These broadly fall into two categories: efficiency and security.

Einvoicing KSA can increase efficiency in transactions by making trade more seamless, and efficient, which results in faster payments and reduced costs. This also enables fair competition, increases business competitiveness, and improves consumer protection in the market, in line with international best practices.

Read about ZATCA Approved Software to know more about e-invoicing for your business.

E-invoicing allows the government to detect and reduce the shadow economy and to monitor the movement of goods, services, and money in (near) real-time, depending on the model that will be implemented. 

Taxpayers benefits of KSA e invoicing:

A better experience for sellers and buyers. When you issue e invoices quickly in real-time, input tax credits will be processed faster.

Electronic data will be more secure and less error-prone than paper entries.

A streamlined e invoicing process reduces slip-ups and additional hassles for business owners.

To comply with the rules, it’s essential that every resident taxpayer is prepared for einvoicing in KSA. Here’s what you need to know about how the KSA e invoicing regulations will impact you, and what you need to do in the future.

Phases of e invoicing in KSA

Phase 1: Generation

The first phase of the e-invoicing implementation in Saudi Arabia, which comes into effect on December 4, 2021, is intended to serve as an entry point for implementation and conversion. No central e-invoicing platform is yet required for this.

Taxpayers must create their invoices in a structured, electronic format. No format is prescribed, but it is recommended to use the format that will be mandatory from January 2023. The invoices must contain all relevant mandatory fields specified by ZATCA. In addition, a QR code must be included in the invoice data that can be scanned with a smartphone. QR codes generated in invoices should be readable using ZATCA app and will be used by ZATCA authorities for validating e invoicing in KSA.

Phase 2: Integration

During this phase, the e-invoicing solution of your choice must be integrated with ZATCA’s new central platform for  KSA einvoicing. The taxpayer will be informed 6 months in advance regarding this implementation.

The invoices should be issued in one of the two formats-

The Saudi Arabian XML invoice is constructed on UBL 2.1 syntax and the bill definition of EN16931. This should be narrowed by Saudi Arabian guidelines.

The einvoicing in KSA  solution must also have strict tamper prevention measures, such as a digitized signature and a hash value as a universally unique identifier(UUID).

Points to be Completed as part of Phase -2 einvoicing KSA requirements.

1. Generates UUID, invoice hash, invoice counter value, QR code & convert invoice into specified XML format as per e invoicing in Saudi Arabia  phase 2 requirement.
2. Generate XML invoice & receive certified XML back from ZATCA.
3. Adding phase 2 QR code & certified XML into an existing invoice to generate final PDF A/3 invoice.
4. Automatically emails the final PDF A/3 invoice to your customer.
5. einvoicing KSA data archival for up to six years on cloud servers as per ZATCA compliance requirements.

Since all the invoices must pass through the ZATCA’s e-invoicing platform, it requires API integration to connect the e-invoicing solution to the central platform.

Future ready e invoicing in KSA solution – Posbytz

Posbytz, an mini ERP solution solution is one of the top-in-class e-Invoicing software with POS , inventory, online ordering, Accounting, CRM and HR & Payroll Integration and is trusted by over 5,000+ Businesses Globally.

From generating e-invoices instantly to storing and keeping track of them, Posbytz, the best Einvoicing KSA billing software in Saudi Arabia, takes care of every little detail to bring you the most delightful experience. Posbytz, e invoicing in KSA software, helps to develop an omnichannel strategy to target customers more effectively, scale your business, and grow revenue.

We offer a complete platform to manage your business seamlessly with all compliance of ZATCA Digital e-invoices and send e-invoices digitally over email/WhatsApp automatically. We provide a solution ready for omnichannel businesses with outlets & e-commerce for e-invoicing.

We recommend you to try PosBytz if you are ZATCA complied software for your business. By doing this, you will have a much easier time finding the best Retail POS system  and best Restaurant POS system in Saudi Arabia

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