The Zakat, Tax and Customs Authority (ZATCA) has delineated specific criteria for selecting taxpayers to participate in the twelfth wave of the “Integration Phase” of E-invoicing. This phase, set to commence on December 1, 2024, targets businesses with annual VAT-subjected revenues exceeding SAR 10 million in 2022 or 2023.
Key Requirements for the Integration Phase
In the second phase of E-invoicing, known as the Integration Phase, ZATCA mandates that taxpayers enhance their existing E-invoicing systems to seamlessly integrate with the Fatoora platform. This integration demands adherence to several new requirements:
- System Integration: Taxpayers must ensure their E-invoicing systems are compatible with ZATCA’s Fatoora platform.
- Invoice Format: E-invoices must be generated in a specific format as prescribed by ZATCA.
- Additional Fields: The invoices need to include additional fields to meet regulatory standards.
Gradual Implementation
ZATCA has planned a phased approach to the Integration Phase, rolling it out in waves. Taxpayers selected for each wave will receive a notification at least six months before their designated integration date. This strategy allows businesses ample time to prepare and ensures a smoother transition to the new system.
Economic and Digital Transformation
The introduction of the Integration Phase is a significant step in Saudi Arabia’s broader economic development and digital transformation efforts. The successful implementation of the initial Generation Phase, which started on December 4, 2021, laid a solid foundation for this progression. Phase One required taxpayers to cease using handwritten or basic computer-generated invoices and adopt comprehensive E-invoicing solutions that meet specific regulatory requirements, including the generation and storage of E-invoices with QR codes.
As ZATCA rolls out the integration phase of E-invoicing, businesses must prioritize compliance and readiness to seamlessly transition to the new requirements. By embracing digitalization and aligning with ZATCA’s vision, companies can not only streamline their operations but also contribute to the broader goals of economic growth and digital transformation in Saudi Arabia. Stay tuned for further updates as Phase Two unfolds, shaping the future of taxation and business practices in the Kingdom.