24 Nov

Best-E-Invoicing-Software-in-Saudi-Arabia-KSA

KSA e invoicing phase 2

Zakat, Tax and Customs Authority (ZATCA), the taxation authority in Saudi Arabia (SA), announced that phase 2 of e-invoicing started on 1st January 2023. Also, ZATCA announced on 24th June 2022 that the first wave of taxpayers includes the Value Added Tax (VAT) registered taxpayers whose revenue exceeded 3 billion SAR for the year ending 2021.

The applicable taxpayers shall start integrating ERP/accounting system and get ready for e-invoicing by 1st January 2023. While preparing for phase 2, you might get a few doubts, and this blog provides a few FAQs and answers on e invoicing phase 2 of ZATCA.

Top FAQs when implementing ZATCA Phase 2

Below are the list of FAQ’s for KSA e invoicing Phase 2

FAQ

1) What is ZATCA Phase 2?

The integration phase, known as phase 2 of e-invoicing, is an IT system of business issuing tax invoices as per ZATCA e invoicing, such as POS, accounting software, ERP etc., needs to be integrated with the ZATCA’s system (Fatoora Portal). Where all the invoices should be automatically pushed to Fatoora Portal on daily basis.

In this system, once the supplier generates the invoice, the details will be electronically uploaded to the Fatoora portal, which will validate and authenticate the invoice. After successful authentication, each invoice is digitally signed and added with a QR code.

2) What is the difference between ZATCA phase 2 and phase 1?

The Generation phase, known as phase 1 of e-invoicing where any business is mandated to issue the simplified tax invoice with the QR code. Where in the Phase 2 all businesses should integrate with Fatoora portal to push all the invoices to ZATCA system for tax computation and further return fillings.

3) Is KSA e invoicing phase 2 is only applicable for B2B businesses or B2C businesses?

E invoicing phase 2 is applicable for both B2C and B2B business also mandatory to integrate with Fatoorah Portal

4) Is e invoicing phase 2 ZATCA mandatory for all business in Saudi Arabia?

Yes, ZATCA had begin the rollout of its E invoicing phase 2 mandate in from Jan 2023 and has been mandated in phases based on the turnover of the business. Check below to know the timeliness for various phases for implementation of KSA e invoicing Phase 2

5) What is the timeliness for implementation of ZATCA E invoicing Phase 2 ?

KSA e invoicing phase 2 started from 1st January 2023 to the targeted taxpayer groups in waves. Accordingly, ZATCA notified the waves as shown in the below table:

Wave Number	VAT Turnover	Which year turnover to be considered	e-Invoicing to be implemented from
Wave 1	More than SAR 3 billion	2021	01.01.2023
Wave 2	More than SAR 500 million and less than SAR 3 billion	2021	01.07.2023
Wave 3	More than SAR 250 million and less than SAR 500 million	2021 or 2022	01.10.2023
Wave 4	More than SAR 150 million and less than SAR 250 million	2021 or 2022	01.11.2023
Wave 5	More than SAR 100 million and less than SAR 150 million	2021 or 2022	01.12.2023
Wave 6	More than SAR 70 million and less than SAR 100 million	2021 or 2022	01.01.2024
Wave 7	More than SAR 50 million and less than SAR 70 million	2021 or 2022	01.02.2024
Wave 8	More than SAR 40 million and less than SAR 50 million	2021 or 2022	01.03.2024

E invoicing Phase 2 technical requirements in KSA

6) What are the technical requirements defined for KSA E invoicing Phase 2 ?

KSA e Invoicing Phase 2 imposed by ZATCA an additional set of requirements. The specified list of mandatory fields in the second phase of e invoicing includes UUID, Cryptographic Stamp, Cryptographic Stamp Identifier, Previous Invoice Hash, and QR Code. Further, such compliant e-invoicing solutions must be integrated with the system of ZATCA to generate e-invoices in a standard format.

6) What invoice formats do i need to handle in new regime?

Usually, any business operating in KSA must maintain the below invoice formats:

Standard tax invoice
Simplified tax invoice
Credit note
Debit note
Nominal invoice
Self bill
Export invoice
Third-party invoice
Summary invoice

6) What are the acceptable formats of e invoicing phase 2 ZATCA?

According to e-invoicing regulations in Saudi Arabia, your e-invoicing solution in the integration phase of e-invoicing must generate, share, and store e-invoices in specific formats of XML or PDF/A-3 with embedded XML. However, to share the invoice details to portal for clearance, it should be in XML format.

7) What is the maximum duration for syncing the e invoices to ZATCA Fatoora portal?

E invoicing phase 2 sales invoices should be synced within a maximum duration of 24 hours through an integrated e-invoicing solution with Fatoora Portal.

8) Can anyone access Sandbox and Fatoora Portal for integrating KSA e invoicing phase 2?

No, Sandbox can be accessed by anyone, but FATOORA production system can be accessed only by taxpayers using Taxpayer portal credentials (ERAD credentials).

9) Will I need to change anything in the current business process flow of creating an invoice to comply with the new ZATCA-compliant guidelines?

You must modify your invoicing process to capture the mandatory fields required as per phase 2 rules and regulations. You may need to make some system changes to do so.

Integration requirement for ZATCA e invoicing phase 2 in KSA ?

10) How can i get started with my E invoicing phase 2 integration with Fatoora portal?

Firstly as a tax payer you need to have access to Fatoora portal using Taxpayer Portal credentials (ERAD) and then follow the e-Invoice Generation Solution (EGS) onboarding process.

11) What is EGS onboarding under KSA e Invoicing phase 2?

The e-Invoicing Generation Solution (EGS) can either be an ERP, Point of Sale (PoS) machine, or Online cash register (OCR).

12) What are the Prerequisites for EGS Onboarding?

Listed down are the requirements for EGS Onboarding in Saudi Arabia,

Login credentials to the Taxation Portal (ERAD).
Internet connectivity to connect with the Fatoora portal.
ZATCA-compliant e-invoicing solution.
Application Programme Interface (APIs) for integration.
PosBytz e invoicing setup shall be installed in the PosBytz backend portal.

13) How can I verify that my e-invoicing solution has been successfully integrated?

Once you’ve successfully onboarded the EGS, ZATCA will notify you, indicating whether the e-invoicing solution has been successfully integrated. Also, you can use the Fatoora portal to view a summary list of all their integrated e-invoicing solutions.

14) What are the different ways to implement Phase 2 Einvoicing ZATCA compliant ?

You can directly integrate with ZATCA using APIs; overall, six methods are available for integration.

15) We have 15 stores across the kingdom, and each store has a POS machine in them. All the sales data is pushed to the HO centrally real time or later. Should we integrate with ZATCA from the store itself or from the HO?

You must integrate them with ZATCA at the store level to report B2B invoices generated at 58 stores.

16) How can PosBytz help you to be complied to ZATCA E invoicing phase 2?

PosBytz is one of the Best ZATCA Approved e-invoicing software for Phase 2. Either you can Sign-up to PosBytz ERP solution to manage your overall business from POS , online ordering, Inventory , Accounting, CRM and payroll. Or you can opt only for ZATCA phase 2 E invoicing phase 2 using our simple API’s to connect your ERP or invoicing software with ZATCA.

17) We have an in-house customized ERP for invoicing. Can PosBytz help us and guide us on how to integrate with ZATCA for E invoicing Phase 2?

PosBytz E invoicing solution can be integrated with any in-house ERP or POS system. Please write to us at info@posbytz.com for any details.

General FAQs for ZATCA e invoicing phase 2 KSA ?

18) Do we need to implement ZATCA Phase-2 for Restaurant Businesses ?

Yes, As per ZATCA all businesses in Saudi Arabia should comply with ZATCA phase-2. PosBytz is an ZATCA approved Restaurant Management software which includes Restaurant POS , inventory , online ordering , Accounting, HR & payroll , CRM & many more.

19) Do we need to implement ZATCA Phase-2 for Retail Businesses ?

Yes, As per ZATCA all B2B and B2C businesses in Saudi Arabia should comply with ZATCA phase-2. PosBytz is an ZATCA approved Retail Management software which includes Retail POS , Purchase & inventory , ecommerce ,Accounting, HR & payroll, CRM & many more.

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