ZATCA, the major tax regulating authority in Saudi Arabia for customs and other taxes, announced the proposed implementation of the e-invoicing initiative in two phases in 2021. Accordingly, phase 1 of e-invoicing was implemented from 4 December 2021, with phase 2 being scheduled from 1 January 2023.
Phase 2 is being implemented in waves, with taxpayers being divided into groups based on their revenue in the year ending 2021/2022. The businesses falling in the specific groups would be notified 6 months in advance about their respective waves. Phase 2 of e-invoicing requires taxpayers to onboard their e-Invoice Generation Solution (EGS) with the Fatoorah or e-Invoicing portal. This article explains the process that businesses need to follow to connect with the Fatoorah portal.
ZATCA integration is not necessary for Phase 1 of e-invoicing to be compliant. However, companies must activate their EGS and interface with an exclusive portal offered by ZATCA in order to comply with the e-invoicing regulations of phase 2. The EGS units either create new Cryptographic Stamp Identifiers (CSIDs) or renew the current CSIDs. Using the Fatoorah site taxpayers can cancel CSIDs and check a list of solutions and devices that have been onboarded using the Fatoorah portal.
The e-Invoicing Generation Solution (EGS) can be either an enterprise resource planning (ERP) system, a Point of Sale (PoS) machine, or an Online cash register (OCR). Internet connectivity, login credentials, an e-invoicing solution that is compliant with ZATCA, and Application Programme Interfaces (APIs) for integration are essential for EGS onboarding.
Device registration under Saudi Arabia e-invoicing involves the following steps:
APIs are required to complete stages 5, 6, and 7. To make it easier for businesses, we have got our unique bridge product – VATCare. VATCare is designed to be a bridge system between your existing ERP/Accounting Solution and the Fatoora portal. VATCare APIs make it easy to integrate with your POS or ERP. By doing this, you may use ZATCA to automatically register hundreds of ERP/POS in one click and get a cryptographic stamp for each device.
Using the VATCare product, you can easily forget about the complexities of e-Invoicing. Whether you’re trying to navigate the Fatoora Portal for e-invoicing or use the Fatoora Simulation Portal to ensure compliance with Phase 2 regulations, or seeking to implement a robust ERP system for your business, HAL Simplify’s team of expert ERP developers are prepared to assist you every step of the way. Harness our expertise today and simplify your invoicing process, ensuring that your business operates at its full potential.
Digitally Signed Invoices: Under the e-invoicing system it is mandatory that all invoices are digitally signed by ZATCA. The digital signature validates the authenticity and integrity of the e-invoice. In addition, key invoice data, such as the invoice number, the total invoice amount, and a timestamp indicating time of invoice generation, get appended to the digital signature.
Confirmation of Receipt by ZATCA: It is important that businesses receive confirmation from ZATCA on their digitally signed and submitted invoices.This confirmation assures the sender that the invoice has been successfully submitted and is currently under review. Businesses can view this confirmation on their respective Fatoorah portal.
Checking Invoice Status on the Fatoorah Portal: The Fatoorah portal is thus a central hub for businesses to track the status of their e-invoices. In the section on E-invoicing statistics inside Fatoora portal, businesses can check every invoice that has been submitted to ZATCA and if it has been successfully processed or not. If there is a problem with an invoice, the business can review, correct, and resubmit it through the same portal.
Other Uses of the Fatoorah Portal: The Fatoorah portal serves other purposes as well. Businesses can access a summary of all documents they’ve submitted in the past 12 months, categorized as “Accepted documents,” “Accepted documents with warnings,” and “Rejected documents.” This makes it easier for businesses to track their compliance status.
Becoming compliant with Phase 2 of e-invoicing is crucial for businesses aiming to stay ahead in the evolving digital landscape. Understanding the fundamentals of e-invoicing and familiarizing themselves with the regulatory framework helps businesses achieve the required compliance smoothly.
Generating and sending invoices electronically: This requirement can be met through a system that allows businesses to generate invoices in the stipulated electronic format, attach necessary details as per the KSA’s invoicing regulation, and send them to customers or clients.
Storing e-invoices correctly: Storing e-invoices involves keeping a record of all issued and received invoices for a minimum period of time as required by Saudi law. The storage should be secure, accessible and allow retrieval of the invoices when needed.
Ensure proper format and content in e-invoices: Compliance with e-Invoicing Phase 2 mandates businesses to ensure that their invoices contain certain mandatory fields. The format should be as per the approved standards and should contain all necessary details. You can refer to the following guidelines issued by ZATCA to understand the exact format – ZATCA Guideline
E-invoicing statistics on the Fatoorah portal: The Fatoorah portal offers a statistics page where businesses can view a summary of all documents they’ve submitted in the past 12 months. It provides a quick glance at their compliance status and areas that may need attention. These statistics are essential for internal reporting, auditing, and ensuring continued compliance with e-invoicing regulations.
