The Zakat, Tax, and Customs Authority (ZATCA) has released the wave 15 under phase 2 of Saudi Arabia’s e-invoicing program. Entities registered for VAT with an annual turnover that exceeds SAR 4 million in the year 2022 or 2023 must fall under wave 15. The taxpayers must integrate their e-invoicing solutions with the Fatoora platform by March 1 2025.
Key Phase 2 Requirements
ZATCA has defined the additional requirements required for the Phase 2 conformity:
- Integration of e-invoicing services in conjunction with The Fatoora portal.
- Inclusion of mandatory fields in electronic invoices.
- Electronic invoices issued in the format prescribed by ZATCA format.
ZATCA notifies businesses of their participation in a wave six months prior to the deadline for integration.
Summary of Announced Waves Under Phase 2
- Wave 1: Turnover over SAR 3 billion by 2021, and fully integrated on January 1, 2023.
- Wave 2: Turnover in the range of SAR 500million and SAR 3 billion by 2021 and integrated by the 1st of July 2023.
- Wave 3: The turnover ranges between SAR 250 million and SAR 500 million in 2021 and 2022, with integration taking place on October 1, 2023.
- Wave 4: Turnover between SAR 150 million and SAR 250 million in 2021-2022. Integration by November 1, 2023.
- Wave 5: The turnover between SAR 100 million to SAR 150 million by 2021 and 2022, Integration before December 1, 2023.
- Wave 6: Turnover in the range of SAR 70 million to SAR 100 million by 2021 or 2022 and integrated on January 1, 2024.
- Wave 7: Turnover from SAR 50 millions as well as SAR 70 million by 2021 or 2022 and integrated before February 1, 2024.
- Wave 8: Turnover between SAR 40 million and SAR 50 million by 2021 and 2022. Integration by March 1, 2024.
- Wave 9: The turnover is from SAR 30 million to SAR 40 million by 2021 and 2022, which will be integrated on June 1, 2024.
- Wave 10: Turnover ranging from SAR 25 to SAR 30 million by 2022 and 2023, which will be integrated before June 1, 2024.
- Wave 11: Amount of turnover from SAR 15 and SAR 25 million by 2022 and 2023, which will be integrated before June 1, 2024.
- Wave 12: Turnover in the range of SAR 10 and SAR 15 million by 2022 and 2023. Integration before December 1, 2024.
- Wave 13: Turnover from SAR 7 millions to SAR 10 million by 2022 or 2023 incorporated on January 1, 2025.
- Wave 14: Turnover between SAR 5 million to SAR 7 million by 2022 or 2023 and integration by February 1, 2025.
- Wave 15: Amount of turnover above 4 million SAR in 2022 or 2023. Integration before March 1st, 2025.
The Impact of E-Invoicing on Saudi Arabia
ZATCA highlights that Phase 2 of eInvoicing aids in the country’s digital transformation and economic expansion. Following the successes of Phase 1, Phase 2 will enhance transparency.
The law was implemented in December 4 2021 Phase 1 of the law mandated VAT registered companies to:
- Remove handwritten and non-compliant computer generated invoices.
- Adopt ZATCA-compliant e-invoicing systems.
- Include QR codes as well as other fields of data in invoices.
- Store e-invoices and associated note cards for credit and debit (CDNs).
The second phase aims to improve the efficiency of operations and ensure compliance with the announcement of wave 16.