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.
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