Saudi Arabia
E-invoices are mandatory for VAT-registered businesses. Overseen by ZATCA, e-invoicing enhances transparency and streamlines operations.
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Implementation Timeline
| Date | Phase | Details |
| Dec 4, 2021 | Phase 1: Generation and Storage | All VAT-registered businesses must generate and store e-invoices electronically, meeting XML and QR code requirements. |
| Jan 1, 2023 | Phase 2: Integration and Reporting | Integration with Fatoora, requiring realtime validation and issuance of invoices with cryptographic stamps, hash values, and unique identifiers. |
Compliance Dates by Revenue Threshold (SAR)
Saudi Arabia has implemented a phased approach to e-invoicing compliance, with deadlines based on annual revenue thresholds. Below is the timeline for businesses to comply with the regulations:| Wave | Annual Revenue Threshold (SAR) | Compliance Date |
| 1 | Over 3 billion | Jan 1, 2023 |
| 2 | Over 500 billion | Jul 1, 2023 |
| 3 | Over 250 billion | Oct 1, 2023 |
| 4 | Over 150 billion | Nov 1, 2023 |
| 5 | Over 100 billion | Dec 1, 2023 |
| 6 | Over 70 billion | Jan 1, 2024 |
| 7 | Over 50 billion | Feb 1, 2024 |
| 8 | Over 40 billion | Mar 1, 2024 |
| 9 | Over 30 billion | Jun 1, 2024 |
| 10 | Over 25 billion | Oct 1, 2024 |
| 11 | Over 15 billion | Nov 1, 2024 |
| 12 | Over 10 billion | Dec 1, 2024 |
| 13 | Over 7 billion | Jan 1, 2025 |
| 14 | Over 5 billion | Feb 1, 2025 |
| 15 | Over 4 billion | Mar 1, 2025 |
| 16 | Over 3 billion | Apr 1, 2025 |
| 17 | Over 2.5 billion | Jul 31, 2025 |
| 18 | Over 2 billion | Aug 31, 2025 |
Who Needs E-Invoices
- Large Enterprises: Must integrate with Fatoora for issuing and validating invoices.
- Small and Medium Enterprises (SMEs): Gradually included in the rollout.
- Non-resident businesses: Currently exempt, but future obligations may apply for transactions with Saudi entities.
E-Invoicing vs. E-Billing
| Aspect | E-Invoicing | E-Billing |
| Regulation | Mandatory (ZATCA) | Not regulated for compliance |
| Purpose | Tax compliance | Internal/customer interactions |
| System Integration | Required (Fatoora) | Not required |
Key Features of Saudi Arabia’s E-Invoicing System
- Submission via Fatoora: Businesses must submit invoices in XML format.
- Validation: ZATCA ensures compliance and issues cryptographic stamps and hash values.
- Archiving: Invoices must be stored electronically for 6 years for audits.
E-Invoicing Dataset
- Buyer/Seller IDs: VAT identification numbers.
- Invoice Details: Invoice number, issue date, and payment terms
- Goods/Services: Descriptions, quantities, unit prices, and VAT details.
- Taxes: Detailed VAT rates and amounts
- Transaction Info: Total payable amount, payment method, and currency.
- QR Code: Mandatory for simplified invoices.
E-Invoicing Across Transaction Types
- B2B: TransactionsMandatory validation via Fatoora ensures VAT compliance and reduces manual errors.
- B2C: Transactions Simplified e-invoices with QR codes are required for consumer transactions.
- B2G: Transactions Mandatory for government transactions, ensuring transparency and compliance.
Penalties for Non-Compliance
- Fines: €1,250–€12,500 per violation.
- Operational Disruptions: Rejected invoices can delay payments and negatively impact cash flow.
- Legal Risks: Repeated violations may lead to audits, legal action, and reputational damage.
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