Saudi Arabia: Criteria for sixth group of taxpayers to comply with second phase of e-invoicing implementation
Sixth group of taxpayers will consist of those with revenues subject to VAT exceeding 70 million Saudi Riyals during 2021 or 2022
Criteria for sixth group of taxpayers
The Zakat, Tax and Customs Authority (ZATCA) on 16 June 2023 announced the criteria for selecting the sixth group of taxpayers that will be required to comply with the second phase of implementation of the electronic invoicing (e-invoicing) system. This announcement comes as part of the ZATCA's efforts to modernize the tax system and improve compliance.
According to the announcement, the sixth group of taxpayers will consist of those with revenues subject to value added tax (VAT) exceeding 70 million Saudi Riyals during 2021 or 2022. The integration phase of e-invoicing is also known as the “Phase 2” of compliance and consists of integrating the e-invoicing solutions of the taxpayers with the “FATOORA Platform.” For the sixth group of taxpayers, this mandate will start from 1 January 2024.
ZATCA informed that this phase will also require taxpayers to issue e-invoices based on a specific format and include additional fields in the invoice. As this integration phase will take place in waves, ZATCA will notify taxpayers at least six months in advance of the specific date on which each taxpayer will be required to comply. This phase comes with additional requirements for storing e-invoices with the required fields, including the QR code.
ZATCA encourages taxpayers to prepare for the second phase of the e-invoicing implementation and to seek guidance from the authority if needed. The authority also reminds taxpayers that compliance with the e-invoicing system is mandatory and failure to comply may result in penalties.
For more information, contact a KPMG tax professional:
Kathya Capote Peimbert | kcapotepeimbert@kpmg.com
Ramon Frias | ramonfrias@kpmg.com
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.