E-invoicing is a way to authenticate in which businesses generate electronic invoices. Tax invoices are published in a standard, machine-readable language to the ZATCA system and are only issued to buyers when they have been electronically approved. These e-invoices feature all of the information found on a paper invoice, such as the date, client data, products or services sold, invoice amount, and VAT split, but they are maintained electronically and include some additional required areas. E-invoicing applies to all resident taxpayers in Saudi Arabia who issue tax invoices, as well as third parties who issue tax invoices on behalf of individuals.
In 2018, the Kingdom of Saudi Arabia imposed VAT with a standard rate of 5% and particular, limited types of transactions classified as zero-rated or exempt. To offset the effects of the worldwide pandemic, the VAT rate was raised to 15% in mid-2020. The next major reform to the VAT system will be the implementation of e-invoicing, which will go into force on December 4, 2021.
The purpose of this reform is to optimize the Kingdom’s tax collection by streamlining the invoicing process, increasing VAT compliance, and streamlining the invoicing process. E-invoicing ensures certain electronic invoice formats are followed consistently, which increases invoice interoperability and readability. By tying input tax credit to output tax on the ZATCA portal, this strategy also aids tax authorities in detecting fake invoices.
Saudi Arabia intends to roll out the e-invoicing system in two phases.
The whole first phase will commence on December 4, 2021. On or before this deadline, all taxpayers should be able to create, edit, and store e-invoices in the appropriate electronic forms.
The second phase of execution is scheduled to commence on January 1, 2023, in stages. Taxpayers’ e-invoicing systems must be integrated with the ZATCA’s e-invoicing portal by this date in order for Continuous Transaction Controls (CTC) to function. During this phase, taxpayers must begin submitting invoices to the ZATCA system for authentication before sending them to purchasers.
How can Axolon ERP assist?
Simply enabling the e-invoicing option in your Axolon ERP Software provides you with all of the tools and automation required for e-invoicing. You can also edit your invoice templates to add QR codes and e-signature fields.
With all of the major functions covered, Axolon ERP is ready to make e-invoicing an easy process for taxpayers
Keep your payments and data safe.
Changing invoices and their associated comments, as well as tampering with timestamps or log entries, is not permitted under ZATCA guidelines. The Axolon ERP system assists in avoiding such compliance errors by prohibiting users from changing or deleting transactions or interfering with their timestamps. The activity logs in the software display the sequential stage-by-stage evolution of each transaction, but they are not editable.
The deployment of e-invoicing in Saudi Arabia is projected to be a huge success for businesses of all sizes, and it is past time to begin planning for this new system. Choosing Axolon ERP while moving to e-invoicing would provide you with the advantages of delivering electronically generated digital invoices while also complying with all ZATCA rules.
Axolon cloud ERP provides proactive, preventive, and analytic controls that analyze threat and vulnerability identification and continuous security surveillance to protect your intellectual property. For discuss your system implementation and compliance, request an estimate for Axolon’s e-invoicing solution today.
*Please note this information is provided as per our understanding on e- invoicing notification. For more information, please refer to government publications on e-invoicing
