Phase 1 changes in invoicing

1. How is invoicing changing as of the 4th of December, 2021?

  1. All persons subject to e-invoicing must use e-invoicing compliant electronic solutions for the generation of e-invoices.
  2. E-invoicing must include the minimum additional fields mentioned in question 2. 
  3. E-invoices should have QR codes.
  4. E-invoicing compliant systems must forbid the prohibited functions determined by the ZATCA. (See question 7)
  5. Simplified tax invoices, usually issued for B2C transactions must have a QR code. 
  6. Tax invoices, usually issued for B2B transactions must have the buyer's VAT number if he/she is VAT-registered, however, the QR code is not mandatory in the first phase. 
  7. The taxpayer should keep a copy of all the issued tax invoices. 

2. What are the technical functionalities required for e-invoicing solutions?

Phase 1: 4th of December, 2021
  1. The ability to generate different types of invoices and notes
    1. Simplified invoices and their associated credit or debit notes
    2. Tax invoices and their associated credit or debit notes
  2. The format required for e-invoices and notes
    1. No specific format is required as long as the required data and content is present in the invoices and notes
  3. The structure of e-invoices and notes as per ZATCA requirements
    1. Tax invoices should contain the following (all rights reserved to Zakat, Tax, and Customs Authority) 

    2. Simplified invoices should have the following (all rights reserved to Zakat, Tax, and Customs Authority) 
    3. Tax invoices credit/debit notes should have the following fields (all rights reserved to Zakat, Tax, and Customs Authority) 
    4. Simplified invoices credit/debit notes must contain the following (all rights reserved to Zakat, Tax, and Customs Authority) 
  4. Processing data and reinforcing security
    1. The ability to export e-invoices and their associated notes to an offline local archival
    2. E-invoices unit locks or a mechanism to record tampering evidence  
  5. The ability to store and archive data
    1. The ability to export e-invoices and their associated notes to an offline external local archival system. These files should contain a VAT registration number, the issuance date, the issuance time, and reference number 
  6. The generation of QR codes for simplified invoices and associated notes
    1. The seller's name
    2. The seller's VAT registration number
    3. The timestamp of the simplified invoice or debit/credit note (date/time)
    4. The total amount including the VAT amount
    5. The VAT total

3. What are prohibited functions specified by the ZATCA for e-invoicing compliant systems in phase 1?

  1. Uncontrolled access
    1. A lack of user management leading to anonymous access, 
    2. Absence of user session management
    3. Ability to operate with a default password.
  2. Tampering with the information:
    1. Deletion or modification of e-invoices or their notes and logs
    2. The generation of inaccurate time stamps
    3. Non-sequential log generation
    4. Resetting the electronic invoice counter.
  3. Multiple Electronic Invoice sequence:
    1. Allowing the ability to generate more than one electronic invoice sequence at any given time.

4. Do my electronic invoices have to be approved by ZATCA or a 3rd party in Phase 1?

Taxpayers are not required to have their electronic invoices approved by the ZATCA for phase 1.