What is an e-invoice in KSA?

E-invoicing is the process of generating invoices in a digital format, so you can issue and store them electronically. 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 process in two phases, starting on December 4, 2021.

For KSA VAT taxpayers, e-invoices 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 government undergoing the transformation to e-invoicing?

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

E-invoicing 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.

Taxpayer benefits of e-invoicing for taxpayers:

A better experience for sellers and buyers. When you issue 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 electronic 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 e-invoicing. Here’s what you need to know about how the KSA VAT 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.

Exchange Process

In phase 1, the electronic invoices do not need to be verified or signed in order to be sent. In addition to the electronic format, the invoice can also be sent in phase 1 in any other readable format or even in paper form.

Phase 2: Integration

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

Read How To Track Restaurant Revenue Management Reports in Saudi to know more about POS usage in the revenue management system

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 e-invoice solution must also have strict tamper prevention measures, such as a digitized signature and a hash value as a universally unique identifier(UUID).

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 solution – Posbytz

Posbytz, an omnichannel POS and ecommerce solution is one of the top-in-class e-Invoicing software with Easy ERP Integration and is trusted by over 5,000+ Businesses.

From generating e-invoices instantly to storing and keeping track of them, Posbytz, the top E-invoicing billing software in Saudi Arabia, takes care of every little detail to bring you the most delightful experience. Posbytz, e-invoicing software in Saudi Arabia, 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 making a list of all the POS features that you think you need for your business, then looking for options. 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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