E-Invoicing in Saudi Arabia, electronic invoicing (e-invoice) has become a necessary feature of business structures thanks to technological advancements. According to legislation, an e-invoice is a tax invoice provided electronically by each taxpayer subject to value-added tax in the Kingdom.
Fatoorah takes off to start the shift
To begin with, last December, the Saudi Zakat, Tax, and Customs Authority (ZAKAT) launched the first phase of the Fatoorah e-invoicing initiative. This initiative aims to create a system that allows buyers and sellers to easily exchange and process invoices, credit, and debit notes.
The first phase ensures that there is an existing technical e-invoicing solution available that meets the standards. This implies no handwritten bills or invoices created on computers using text editors or numerical analysis software.
The second phase is expected to be implemented starting from January 1, 2023. It will establish synergy between taxpayers’ e- systems and the authority’s regulations.
Skip the fines
Authorities take this seriously. For failing to issue and save invoices electronically, a fine of SR5,000 (Dhs 4,900) should be imposed.
The penalty for failing to include the QR Code in the e-invoice and failing to disclose any errors in the issuance of such to the authority begins with a warning. The penalty for failing to delete or modify an e-invoice starts at SR10,000 (Dhs 9,800).
Benefits on the sectors
Major enterprises and small businesses profit from the new mandated billing approach. Which helps decrease costs and time spent on processing and printing paper invoices.
E-invoicing also improves relationships between suppliers and consumers by shortening payment cycles. Hence, improving accounts reconciliation, enhancing compliance, reducing the amount of physical. In addition, also limiting losses and fraud, promoting fair competition, and reducing tax evasion.
Furthermore, the government can profit from e-invoicing as well, especially when it comes to addressing the shadow economy and commercial deception. (Any illegal business operation that enables non-national individuals or companies to invest or engage in trading activities they are prohibited from).
By reducing the shadow economy and combating business concealment, the project is expected to have a real impact on the national economy.
With this digital transformation opportunity, Business Gulf Experts took the chance and has already done implementations in Saudi Arabia. This maps out the needs of your business and provide the necessary tools. These tools will help to achieve a successful future with as much automation as possible.