The Saudi Arabia Zakat, Tax, and Customs Authority (ZATCA) recently made significant announcements pertaining to the criteria for taxpayers falling within the ninth wave of Phase 2 e-invoicing integration. This vital update targets taxpayers residing in Saudi Arabia with a taxable turnover exceeding SAR30 million during either the calendar year 2021 or 2022.
Executive Summary
Dated November 17, 2023, ZATCA’s announcement on its official website outlined the inclusion criteria for taxpayers in the ninth wave of Phase 2 e-invoicing integration. Specifically, it requires compliance from entities that meet or surpass the SAR30 million threshold in taxable turnover for the specified calendar years. Notified taxpayers are expected to align with Phase 2 requirements by integrating their electronic invoicing systems with the ZATCA’s e-invoicing platform, known as Fatoora.
Furthermore, the ZATCA Governor issued Decision No. 23771 dated 30/04/1445 AH, published in the Official Gazette on 17 November 2023. The decision mandates that affected taxpayers under the ninth wave must adhere to Phase 2 e-invoicing requirements within the period spanning 1 June 2024 to 30 September 2024.
Detailed Discussion
Background
The introduction of e-invoicing in Saudi Arabia dates back to December 4th, 2020, marked by the release of the E-Invoicing Regulation by ZATCA. This initiative unfolded in two key phases:
- Phase 1 (from 4 December 2021): This phase mandated the generation of e-invoices and e-notes, inclusive of relevant processing and record-keeping.
- Phase 2 (from 1 January 2023): Phase 2 brought forth the integration of a taxpayer’s system with ZATCA, requiring the transmission of e-invoices and e-notes to the authority. It’s important to note that this phase unfolds in waves, each with specific criteria and timelines.
The criteria and timelines for the first eight waves had been previously communicated by ZATCA to resident businesses.
ZATCA Announcement
In light of recent announcements, ZATCA is initiating the notification process for taxpayers falling within the ninth wave of Phase 2 e-invoicing integration. The specified go-live window for these taxpayers spans from 1 June 2024 to 30 September 2024.
Implications
Resident businesses meeting the criteria should heed the ZATCA’s notifications and undertake the necessary steps to adapt their IT systems accordingly. Compliance with Phase 2 requirements, as outlined in the e-invoicing regulation, is crucial to avoid potential penalties.
Taxpayers falling outside the first eight waves must vigilantly monitor ZATCA announcements regarding subsequent integration timelines relevant to them.
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