electronic invoice declarations
How to oblige taxpayers subject to the bill to submit electronic invoice declarations periodically to the authority and the procedures that must be taken to start the electronic billing journey. Some of the frequently asked questions about the expected new electronic invoice system are answered below.
What is an electronic invoice?
An electronic invoice is a digital version of a traditional invoice used to document sales and purchases. It includes detailed information about the commercial transaction and is sent and received through technological means, enhancing efficiency and reducing paper consumption.
Who is subject to the electronic invoicing regulations?
All taxpayers subject to value added tax, except for non-resident taxpayers in the Kingdom, as well as any party issuing a tax invoice on behalf of a taxpayer subject to value added tax.
What are the objectives driving Saudi Arabia to implement an electronic invoicing system?
- Reducing undisclosed economic transactions.
- Increasing the accuracy rate of tax returns.
- Reducing commercial concealment and promoting business transparency.
- Promoting fair competition and protecting consumer rights.
- Aligning with international standards and enhancing Saudi Arabia’s global ranking.
Is it mandatory to submit electronic invoice declarations periodically? Yes, it is mandatory to submit invoice declarations periodically.
Is a taxpayer subject to the electronic invoicing regulations required to submit declarations periodically to the authority?
Yes. The taxpayer must continue to submit tax returns on a periodic basis in accordance with the provisions of the Value Added Tax Law and its executive regulations.
Is the electronic billing list considered a separate list?
No, the electronic invoicing regulation is an integral part of the executive regulations for the value-added tax system issued by the Board of Directors of the General Authority of Zakat and Income pursuant to Resolution No. (3839), dated 12/14/1438 AH (“Executive Regulations”).
Is it necessary to adhere to the provisions of the regulations for debit and credit notes?
Yes, individuals must comply with the regulation and issue electronic invoices for their taxable transactions.
Must the subject taxpayer issue an electronic invoice for export?
Yes, the taxpayer must issue electronic invoices for his external supplies, including exports.
Is the taxpayer required to submit periodic returns to the Authority?
Yes, the taxpayer must commit to submitting tax returns on time.
Is there a grace period for compliance with the electronic invoicing regulation?
Yes, individuals subject to the electronic invoicing regulation are granted a grace period starting from the date of publication of the regulation in the Official Gazette until December 4, 2021.
Are there penalties and fines for non-compliance with the regulations?
Yes, penalties related to tax invoices and notifications will apply according to the VAT system and its executive regulations after December 4, 2021.
What are the components of an electronic invoice?
The electronic invoice includes the provisions and requirements related to VAT and any other fields specified by the Authority to ensure compliance.
How are electronic invoices stored? Are there any storage requirements?
Electronic invoices are stored in accordance with the rules for storing tax invoices as stipulated in the Value Added Tax legislation.
What languages can be used to issue electronic invoices?
Invoices must be issued in Arabic, but additional languages can be used alongside Arabic.
What is the mechanism for implementing the electronic invoicing system?
The implementation of the electronic invoicing system consists of two main phases. The first phase involves the issuance and storage of electronic invoices and notifications, while the second phase of the electronic invoice relates to linking invoice issuance systems with the systems of the General Authority for Zakat and Income.
Is issuing and storing invoices and notes electronically mandatory in the first phase?
Yes, issuing and storing invoices and notes electronically becomes mandatory as of December 4, 2021, for all value-added tax (VAT) registrants, except for non-residents in the Kingdom and parties issuing invoices on behalf of others.
Is linking invoicing systems mandatory in the second phase?
The Authority will issue requirements and controls for linking electronic invoicing systems, and linking will become mandatory. Details will be provided within 180 days of the publication of the regulation.
Will the Authority issue further technical requirements beyond the regulation?
Yes, the Authority will issue two separate decisions specifying the technical specifications for issuing, storing invoices, and linking to the Authority’s systems within the same period.
What are the initial steps to embark on an e-invoicing journey?
First, it is crucial to determine whether your business falls under the e-invoicing regulations. Subsequently, assess your readiness to issue and store electronic invoices and credit and debit notes, ensuring compliance with the minimum standards and requirements outlined in the regulations. Additionally, stay updated with any technical specifications by following the official channels of the relevant authority.
The grace period for compliance with the electronic invoicing regulations, the penalties for non-compliance with the electronic invoice, its components, how to save it, the conditions for its preservation, and the languages of its issuance.
Categories subject to the electronic invoicing regulation, the reason for implementing the electronic invoice in the Kingdom, and the mechanism for implementing the electronic invoicing system.
The electronic invoicing system, the electronic invoice, and clarification of documents that are not classified as an electronic invoice, as well as electronic notices..
Technical and procedural specifications for the electronic invoice necessary to use the new electronic invoice.
