This will likely include details about the nature and extent of the standardization GAZT will provide further details about the e-invoicing process within 180 days of the publication of the regulations, as mentioned above. This in turn would lead to achieving increased tax compliance rates, provide increased transparency on commercial transactions and allow data-informed decision making. This also enables fair competition, increases business competitiveness and improves consumer protection in the market, in line with international best practices.įrom a security perspective, e-invoicing allows the government to detect and reduce the shadow economy and to monitor the movement of goods, services, and money in (near) real-time, depending on the model that will be implemented. These broadly fall into two categories: efficiency and security.Į-invoicing can increase efficiency in transactions by making trade more seamless, efficient, and result in faster payments and reduced costs, whilst providing the government with greater insights on market conditions. The KSA government is implementing e-invoicing for a number of reasons. Why is the KSA government implementing e-invoicing? The e-invoicing provisions apply to all taxable supplies subject to the standard or zero rate of VAT and to both resident and non-resident consumers (i.e. E-invoices must be issued in Arabic (additional languages are permitted, in addition to the required Arabic).Details of the requirements, controls, and procedures for the above phases will be issued no later than 180 days from the date of the publication of the regulations (4 December 2020).At a later date, the second phase will come into effect, whereby taxpayers’ systems of issuing electronic invoices and debit and credit notes must be linked with GAZT’s systems to share data and information.E-invoices must be issued from 4 December 2021 (first phase).The following key points should be considered by businesses operating in KSA: The regulations also note that in addition to these regulations and the VAT legislation, the provisions relating to proof of electronic transactions and electronic signatures provided for in the Electronic Transactions Law in force in KSA shall apply to electronic invoices and notes issued.Īlong with the regulations, GAZT has also published an e-invoicing guide and FAQs. It is important to note that the e-invoicing regulations will attract all the provisions related to a tax invoice in the VAT legislation, and any non-compliance will result in penalties from GAZT. That said, the exact type of e-invoicing system is yet to be formally published we expect to see this in the New Year. The regulations specify the terms, requirements and conditions related to electronic invoices and electronic credit and debit notes. GAZT issued the final electronic invoicing (e-invoicing) regulations in Arabic on 4 December 2020, setting out that it will be mandatory for resident taxpayers to be fully equipped to issue, save and modify e-invoices by 4 December 2021. Following the publication by the Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) of the e-invoicing regulations, Deloitte has set out below our recommendations of actions businesses should take ahead of the new rules coming into effect.
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