#structured invoice format KSA

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ZATCA e-Invoicing Software

In the hectic business environment, time is of the importance. Businesses need to discover ways to simplify their procedures and streamline their operations since they have so many jobs to manage and deadlines to meet. Invoicing is one area that can give organizations quite a few issues. The invoicing process may be time-consuming and challenging, involving anything from creating invoices to tracking payments to resolving disputes.

ZATCA e-Invoicing Software can help with it. Businesses can concentrate on what truly matters: expanding their business, by using this cutting-edge software, which is meant to make the invoicing process simpler for them. The process known as "e-invoicing" tries to produce invoices in an electronic or digital format.

Starting on December 4, 2021, the Zakat, Tax and Customs Authority (ZATCA) in the Kingdom of Saudi Arabia requires all VAT-registered enterprises. So as to use electronic invoicing, as stated in a statement from ZATCA. This implies that all businesses must now create invoices digitally.  They can no longer create or save invoices on paper or in PDF format alone. ZATCA ensures accurate detection, subtraction. Also, reporting of taxes from each electronic invoicing transaction in this manner.

Who Is Responsible for Adhering to ZATCA E-Invoice Guidelines?

Any Saudi national who is liable to VAT must follow the mandatory e-invoicing rules and regulations established by ZATCA.Whether the business is B2C, B2B, or B2G.

Invoicing implementation will be required for all taxpayers subject to VAT. Also, with the exception of non-KSA citizens who are liable to VAT, following ZATCA's rules.

To put it simply, a non-resident provider does not fall within the ZATCA compliance category.  And will not produce an e-Invoice for the products or services they give to a resident who is liable to VAT. However, accurate records must be preserved as evidence of the transaction.

Transactions that are E-Invoice-Subject:

Every transaction involving goods or services worth more than SAR 1,000 must have the standard VAT rate applied to it. Regardless of the transaction value, any export of any products or services.

If you meet the standard requirements for creating a Simplified e-Invoice, you must generate e-invoices for zero-rated suppliers. Such as products and services for the home.

If the taxpayer receives an advance payment against the supply of goods or services, an electronic invoice must be issued. 

Any intra-GCC supply transaction. Intra-GCC transactions are those that take place between GCC members.

Businesses can benefit from a number of features that are especially made to simplify the invoicing process. ZATCA's salient characteristics include:

ZATCA's straightforward, user-friendly interface makes creating invoices a breeze and does away with the need for manual data entry. The programme is a flexible option for organizations operating internationally. Because it also automatically calculates taxes and prepares invoices in several languages.

Payment tracking: Businesses can quickly and easily discover which bills have been paid and which are still owing. All thanks to ZATCA's real-time tracking of invoices and payments. By doing this, you reduce the likelihood of missed payments. Also, it guarantees timely payment of invoices.

Options for customization: With ZATCA, businesses can alter their invoices to meet their branding and operational needs. This entails modifying the invoice structure to meet the requirements of the business including adding logos, company information, and payment terms.

ZATCA offers a simple-to-use dispute resolution system to help businesses settle conflicts quickly and effectively. This reduces the chance of disagreements and ensures timely payment of invoices.

As a whole, ZATCA e-Invoicing Software is a comprehensive Invoicing Solution that offers organizations a number of advantages, such as time savings, more accuracy, better cash flow, and increased security. Businesses of all sizes can benefit greatly from the software's user-friendly interface, customization options, and integrations with well-known accounting and payment platforms. These features make the software a great option for companies looking to improve their overall financial management and streamline their invoicing procedures. Businesses may benefit from an effective, secure, and configurable invoicing system that saves them time, minimizes errors, and improves cash flow with ZATCA e-Invoicing Software.

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ZATCA Approved E-Invoicing (Fatoorah) Rolling Out In KSA

What is E-invoicing (Fatoorah)?

E-invoicing is a process that generates electronic invoices to issue and store them electronically. ZATCA — The Zakat, Tax, and Custom Authority is rolling out the first phase of e-invoicing in the KSA, mandating businesses to adopt it from December 4, 2021. The invoice processing, credit notes, and debit notes in a structured electronic format among seller and buyer will become easy with e-invoicing.

All KSA VAT taxpayers can issue e-invoices for VAT through the electronically integrated system. Not all the copied or scanned paper invoices are e-invoices. E-invoices are not editable after being generated. You can generate credit and debit notes that are VAT compliant regarding the original invoice.

E-invoicing standardizes the business transactions, ensuring the whole process works efficiently and securely. Only credit notes are issued if a buyer returns a product, and there is no option to change the original invoice.

All businesses will issue e-invoices for sales made within the country and exports made from KSA.

E-invoices are not mandatory for;

Imports in KSA

VAT exempted supplies; and

Relevant payments.

Why E-invoice is Introducing in KSA?

E-invoicing (Fatoorah) in KSA is rolling out to enable businesses to work more securely and effectively. This move aims to integrate business data with ZATCA to make the trading system as transparent as possible. The government standardizes the way invoices generate with a machine-readable format. After verifying the e-invoices (Fatoorah) from the ZATCA portal, there will be more chances to detect fraudulent activities. This information helps tax authorities not to conduct audits frequently.

The benefits of e-invoicing include a better experience for the buyers and sellers, as follows:

Streamlined e-invoicing will minimize the chances of slip-ups for business owners.

Real-time invoice generation for the tax proceeds added.

High data security

Fewer chances of scams with an aligned e-invoicing system for validating invoices, resulting in competition and improvement of trade.

Guidelines for ZATCA Approved E-invoicing (Fatoorah) in KSA

The e-invoicing provisions will be valid for all taxable goods and services that are subject to VAT.

E-invoicing (Fatoorah) will be for all B2B, B2C, and B2G transactions.

Printed copy to be provided separately.

All VAT registered business owners within KSA and third parties issuing tax invoices on behalf of a taxable person will mandate the e-invoicing (Fatoorah) process.

The standard language for e-invoicing will be Arabic and English.

E-Invoicing (Fatoorah) Implementation Phases in KSA

Phase One (Generation Phase)

Taxpayers can now generate and store e-invoices, from December 4, 2021. In this phase, you will have access to an e-invoicing (Fatoorah) system compliant with ZATCA.

The following fields are mandatory for e-invoicing:

Seller’s name

VAT registration number

Time

VAT total; and

Value of invoice inclusive of VAT

You do not need to share data and invoices with ZATCA in the generation phase.

Phase Two (Integration Phase)

Phase two will execute in different stages for targeted taxpayer groups. Starting from January 1, 2023, you will be required to integrate e-invoices with the ZATCA system for verification. Integration notification from ZATCA will be received six months in advance.

The integration phase will be more about technical requirements. Your system needs to connect with external systems using APIs and generate a UUID (Universally Unique Identifier), a digital signature, a unique number to differentiate invoices, and a cryptographic stamp.

Types of E-invoices

Tax Invoice

Electronic tax invoices are for B2B and B2G transactions.

Phase 1

Invoices will get issued to buyers in a specific format.

Phase 2

Tax invoices will get processed by ZATCA and stamped, cryptographically.

If the buyer is VAT registered, add the VAT registration number to the invoice; and

QR code is optional.

Simplified Tax Invoice

Simplified tax invoices in phase one are for B2C transactions. Buyers won’t need to use the invoice for input VAT deduction. In phase one, you share simplified e-invoices with customers. All e-invoices should be reported to ZATCA within 24 hours with a QR code.

How will the E-invoicing (Fatoorah) Process Work in KSA?

E-invoicing is more secure and effective. Here’s what you are required to do for each transaction:

Use a compliant e-invoicing system to issue the e-invoice with all the mandatory fields.

Issue a copy to the buyer. In phase two, you forward the invoice to ZATCA’s portal and get it validated.

Save the e-invoice in the system for the future.

Migrating to a cloud-based solution for e-invoicing features will make data storage efficient.

The Kingdom of Saudi Arabia takes a step toward implementing electronic invoicing across the country. All taxpayers must equip themselves with an e-invoicing (Fatoorah) system complying with generation and integration phase requirements.

Dynamics Solution and Technology is a certified Microsoft Gold partner company delivering Microsoft Dynamics 365 Solutions in the UK, Asia (Malaysia, Pakistan, India), and Gulf countries (UAE, Saudi Arabia, Bahrain). We develop and deploy effective business solutions that meet clients’ requirements.

To speak to our specialists, contact us at KSA: +966 566 953 627, UK: +44 20 8133 9686, and UAE: +971 545 127 668 or email us your query at info@dynamicssolution.com or visit dynamicssolution.com

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E-INVOICING Fatoorah Saudi Arabia 2021 – REGULATORY & TECHNICAL OUTLOOK

Erpisto #1 E-invoicing Fatoorah Saudi Arabia The Kingdom of Saudi Arabia (KSA) is moving forward with the e-invoicing mandate, with the goal of reaching the first major milestone on December 4, 2021. GAZT's most recent releases enable taxpayers to take the first steps toward implementation.

Action plan for e-invoicing in Saudi Arabia

The introduction of e-invoicing will take place in two stages. The first step covers the creation of electronic invoices and related documentation, as well as processing and record-keeping capabilities. On December 4, 2021, this step will take effect. The second stage (the integration phase) covers the most advanced aspects of the E-invoicing Fatoorah Saudi Arabia, such as electronic signatures. Transmission and exchange of electronic invoices via the GAZT web platform. Although the first stage appears to be less demanding than the second, it already contains a number of particular requirements and calls for the commencement of preparation work as soon as feasible. 

Erpisto #1 E-invoicing Fatoorah Saudi Arabia

The e-invoicing regulation's scope 

The e-invoicing requirements in Saudi Arabia will apply to a variety of documents, including normal tax invoices, simplified tax invoices, credit and debit notes, and more. If these documents are distributed electronically, existing tax requirements will be followed to ensure that the content is compliant.

Only KSA residents can use e-invoicing

Regulations for electronic invoicing All taxable persons subject to VAT and third parties issuing tax invoices for taxpayers will be affected. These regulations will also apply to Saudi Arabian residents only. E-invoices can be issued and stored in a specific electronic format Predefined data fields. These requirements apply to third parties that issue tax invoices for resident taxable persons.

The e-invoicing guidelines 

Persons who are not taxable will not be subject to the provisions of this article resident in Saudi Arabia.

The E-invoicing Regulations have been released

KSA's e-invoicing journey began in September 2020 when the E-invoicing Regulation was created. It finally came into effect three months later in December 2020. However, this is only an overview of the requirement. KSA taxpayers We were eager for a more detailed regulation to be released. This was finally achieved in March 2021. The KSA tax authorities just published an important document. Draft of Controls, Requirements and Technical Specifications for Implementing the E-invoicing Fatoorah Saudi Arabia Regulation The following describes the details of the KSA e-Invoicing concept. 

These are the requirements that will soon be enforced.

GAZT published the following documentation at the same moment as the above document:

-Electronic Invoice Data Dictionary

-Standard for Electronic Invoice XML Implementation

-Standards for Electronic Invoice Security Implementation

Local taxpayers now have the documents in their possession and can begin preparations. What documents are included in these documents? Do they contain all necessary information to prepare for the event? 

Mandatory e-invoicing What is the best way to get started?

Let's take a closer look at the documents in order to better understand them.

Current e-invoicing landscapes in KSA.

Requirements, Controls, Technical Specifications, and Procedural Rules to Implement the Provisions in the E-Invoicing Regulation (the Draft Rules Regulation).

This is the main document. Clarifies the requirements for e-invoicing This document identifies the controls, specifications or procedures required to implement the E-Invoicing Regulation Precautions Both phases of the document are addressed:

Implementation of e-invoicing:

Phase 1:Electronic invoices and electronic notes can be generated The following provisions, which include those related to processing and record keeping, are in effect as of 4 December 2002.

Phase 2:Transmission of electronic invoices or electronic notes Sharing them with GAZT will allow you to implement the program in phases. Phases are expected to begin in June 2002.

The regulation defines the technical requirements. The E-invoicing Fatoorah Saudi Arabia the so-called Compliant solution, which must be developed by taxpayers to meet the requirement. A competent authority or professional third party will certify such a solution.

Compliant Solution should allow the generation and sharing of e-invoices or e-notes in a predefined format (XML, PDF/A-3). This concept's most distinctive element is the set of data security and information security measures (unique identifier UUID and QR code), which are all included in the solution.

Universally Unique Identifiers (UUIDs):All e-invoices are individually identified by an unique number. This number is assigned to each document along with its sequential number. UUID is 128-bit number generated by an algorithm that makes it unlikely that any other system will generate the same identifier.

Cryptographic Stamp GAZT will add this field to the electronic document upon receipt of the electronic document after positive verification of the E-Invoice/E-Note. The Cryptographic Stamp is composed of two fields: ECDSA's public key and ECDSA signature. It will be generated with the same digital certificate that was used to stamp electronic invoices.

Hash: This will ensure that the sequential numbering is used, and that there is no intervention (such a replacement or deletion) apart from the individual numbering that the taxpayer uses. This element will not contain the invoice data, but it will be used to prevent any modifications of the document. The next invoice will use the hash of that particular invoice. It will be calculated from all elements of the previous invoice (UBL bill, hash, previous invoice, QR code and cryptographic stamp).

QR code: This allows for quick and simple verification of the document using QR camera scanners. It will be encoded using Base64 format, with up to 500 characters.

Counter for internal documents: An independent counting solution that cannot reset and allows for quick detection of fraudulent intervention.

A key feature of the Compliant Solution the ability to connect to the Internet, and to integrate with other systems via an application programming interface (API), will be possible. Thee-invoicing integration capability this regulation will apply to each case and is not detailed in the document.

Technical functionalities (Annex 1)

The Draft Rules Regulation gives a comprehensive overview. Technical functionalities of e-invoicing these will be in force during both phases of implementation. The first phase will see taxpayers focusing on the development of the e-invoice/e note generation feature. Only the second phase will introduce integration capability and the security elements previously mentioned. The Draft Rules Regulation also provides a number of additional features prohibited e-invoice functionalities(e.g. Uncontrolled access, modification capabilities, etc. These must not be used.

E-invoice fields (Annex 2)

Draft Rules include a comprehensive list of fields that are relevant to e-Invoices, as well as an indication of the obligation status. Three statuses can be used to indicate the obligation status for specific fields:

Mandatory (the field must be filled in)

Conditional (must only be used if the condition is met).

Optional (fields not required)

The summary table also shows the E-invoicing Fatoorah Saudi Arabia items that will be mandatory upon completion of phase 1 (4/12/2021) and phase 2, (1/6/2022).

[document 2]Electronic Invoice Data Dictionary

The dictionary also includes a description of different terms are used in e-invoicing documentation. It includes the definition of invoice categories, business terms, and their descriptions, as well as the technical specification of each term (UBL specifications). Finally, it provides the KSA-specific context (if applicable) for each business term. You will also find examples of certain elements in the document.

Standard for Electronic Invoice XML Implementation

This document describes the details of the project in a technical way. Structure of the XML. This is used to generate e-invoices or e-notes. This is the Standard for e-invoicing by KSAIt is based upon the EU standard EN16931-1:2017 and the UBL schema (UBL 2.0). The structure also includes a number of KSA-specific elements that take into consideration the KSA's VAT regime. These include business rules.

The invoice must include a unique identifier (UUID).

Specific transaction codes with defined structures, which identify different invoice types (third party invoices, simplified invoices, summary invoices, export invoices, etc.).

payment means code

Credit and debit notes (specific invoice codes) must be used to justify this type of document.

Invoice must contain the hash (using SHA256 algorithm functions) from the previous invoice

Document must include a QR code

Each invoice must include a counter value

Document must be cryptographically stamped

Not yet available are additional XML files (Shematrin)The e-invoicing consultation It is now final.

Standards for Electronic Invoice Security Implementation

This document refers specifically to two security measures: the QR codes and the cryptographic stamp. These are the heart of the system. The security of e-invoices/e-notes.

This standard gives more details about the Cryptographic stamp for e-invoice Business process (issuing/management), requirements for creation, and use, as also the structure and format E-invoicing Fatoorah Saudi Arabia stamp. It also includes the QR code specification.

We expect more developments

While the regulations have provided a lot of information so far, they are not complete. Releases of e-invoicing Expected Most important are the regulations and requirements that refer to integration features. These will allow for the GAZT's portal allows electronic document exchange. GAZT will publish different API types to help taxpayers integrate .E-invoicing solution with the GAZT e-Invoicing Platform invoice clearance.

The KSA e-invoicing regulations are quite advanced. Businesses now have to determine how the regulations will impact them. These assessments will allow for further analysis of the effects of regulations on businesses. Then, a proper implementation project of E-invoicing Fatoorah Saudi Arabia will be undertaken to meet the first deadline (phase 1), which is set for 4 December 2021.

Services We Offer:

·         Automatically receive and send invoices

·         Multi-currency, invoice customization

·         Support all invoice formats

·         Integrate with existing systems

·         Archiving capabilities

·         Multiple forms of payments

·         Integrate analytics

·         Safety and support

·         Invoice number.

·         Reminder For Invoices

·         Terms and conditions.

·         A line detailing each product or service

·         Real-time tracking of invoices

·         One-time reporting of B2B invoices

·         Easy creation of e-way bill

·         Helps the buyers

·         Reduction in frauds

·         Reduction in data entry errors

·         Allows interoperability

·         Curb tax evasion

·         QR code

Click to Start Whatsapp Chatbot with SalesMobile: +966547315697 Email: sales@bilytica.com

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Impact of e-Invoicing on KSA’s Banking System

The General Authority of Zakat and Tax (GAZT) of the Kingdom of Saudi Arabia has proposed to make e-invoicing mandatory from December 4, 2021. This is in line with international best practices and is intended to reduce the shadow economy, increase tax compliance, and promote fair business practices. GAZT has suggested implementation of e-invoicing in two phases. First, businesses should be able to generate and store tax invoices and notes in a structured electronic format with no direct interaction with the tax authority. And second, the taxpayer’s e-invoicing software should be able to integrate with GAZT systems and move to a clearance-based compliance model that can share real-time data with GAZT systems. This regulation is applicable to all persons eligible to pay taxes in KSA as well as third parties who are issuing tax invoice on behalf of taxable residents. Based on the inputs received so far businesses, including banks and financial institutions must be prepared for a whole range of scenarios, including the possibility where approval may be required in real-time for individual invoices and transactions.

e-Invoicing or digital tax invoices does not include scanned or photocopies. These can be shared online and helps eliminate the paper-based invoicing process. e-Invoices must be securely transmitted and stored without compromising the authenticity or integrity of the electronic data. e-Invoicing can enhance transaction efficiency and make them seamless, cost effective and clear. In a system where e-invoicing is the norm, the government will have better and quicker insights into market conditions, be able to improve tax compliance and ensure greater transparency in commercial transactions. From a regulatory perspective, e-invoicing can help detect and reduce the shadow economy, ensure real-time monitoring of movement of goods and services and money. It can drive cost rationalization and reduction across the entire banking supply chain including printing, postal cost, storage, and processing cost. It can help improve banking transparency and financial reporting to clients. It can also give corporate treasurers an early overview of working capital requirements. It also helps in n data-based decision making related to corporate supply chain finance, while providing a tool to improve cash flow and reduce order to cash cycle. The flexibility of e-invoicing models can help automate data feeds into the treasury system which will in turn simplify and accelerate the reconciliation of account information. Once e-invoicing becomes the norm, there will be fewer transaction errors as it ensures faster integrity checks.

Of course, there are concerns about the lack of standardization in invoicing formats as well as security and privacy concerns. But the good news is that e-invoicing service providers are now investing in a common framework for all invoicing solutions to ensure seamless interoperability, format compatibility and maintain data integrity.

As e-invoicing becomes the norm across the world, the banking sector has a distinct edge over newer entrants in the field. A challenging business environment is forcing banking clients to pursue measures that can ensure an efficient working capital ecosystem to support their financial needs. And banks are forced to consider new transaction models to optimize costs. Clients working with these regulations will require seamless and fast flow of billing information between various entities. By leveraging e-invoicing regulations banks can streamline working capital management in the financial supply chain. This will help them optimize costs for both corporate and commercial clients.

Banks can develop e-invoicing systems in-house. But a better option is to partner with a third-party solution provider who can develop, manage and run a comprehensive and future forward e-invoicing solution. Right now, it makes business sense to work with an independent service provider on a revenue sharing model rather than invest in a proprietary platform. Given the short timelines for implementation in KSA, banks need to quickly identify a trusted and capable partner to manage this new system. Banks in KSA must consider partners with experience of working in the banking sector, such as VAT solution providers, who also have an e-invoicing solution that can be integrated seamlessly into their systems. They must also focus on data security, privacy, web access and data encryption to comply with KSA regulations. Banks must evaluate the tax environment and requirements and invest in a solution that can manage tax information and be able to interact seamlessly with regulator systems as well. Any solution deployed by a bank must help them provide open APIs related to authorization, accounts, and transaction data like payments.

Digital transformation of business operations is a reality. e-Invoicing is not just a regulatory requirement but also an effective way to improve the financial supply chain. The modern technology landscape offers banks a significant opportunity to serve customers and markets better. They need to analyze their systems to identify gaps and opportunities and then work with the right solution partners who have the expertise and experience to help them leverage the e-invoicing opportunity. With right solution and alliances, banks can offer collaborative and efficient services which will improve their performance and strengthen their competitive positioning.