How will Phase 1 of the e-invoicing system work?

The introduction of the e-invoicing system in Saudi Arabia will require businesses to create invoices using software or another electronic system. This means that if you issue an invoice manually, even if it is handwritten, it will no longer be considered a valid invoice. Saudi Arabia’s e-invoicing system will be implemented in two phases from December 4, 2021.

The first stage is the generation phase, which requires businesses to generate compliant electronic tax invoices and tax invoices using a compliant electronic invoicing system. and save. In the next phase, the so-called “integration phase”, from January 1, 2023, electronic invoicing software or systems used by businesses will be integrated with ZATCA.

The first wave of the consolidation phase will apply from January 1, 2023 for companies with a turnover of 3 billion or more. The second wave will apply from July 1, 2023, for companies with a turnover of more than 500 million in the 2021 financial year. The key requirement is that the business uses e-invoicing software or a solution that meets the e-invoicing requirements and specifications set by the authorities.

At this stage, electronic invoices must be created and issued to the seller using enterprise software or other electronic means. The only thing businesses need to ensure is that their invoices include all the required components, such as the TRN number and, in the case of quick invoices, the QR code. He must add a QR code to simple invoices and tax invoices. That’s optional.

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