e-Invoicing Formats in Saudi Arabia

Tally Solutions | Updated on: December 13, 2023

• Identifying the right format of your e-invoice
• e-Invoice formats in Saudi
• Difference between tax and simplified e-invoice formats
• How TallyPrime can help you in e-invoicing?

Huge steps towards tomorrow have been taken, the traditional paper-printed invoice in Saudi Arabia is history now. And while the future and the ambitious vision of Saudi Arabia is coming true quickly, day after day. Your business must be ready to be on the right track where everything can be measured and solved in a few seconds.

On the 4^th of December 2020, Zakat, Tax and Customs Authority (ZATCA) published the e-invoicing regulations specifying the terms, requirements, and conditions related to electronic invoices and their associated notes.

Digitalizing all transactions and processes in your business are critical to succeed in the new era. After e-invoicing became mandatory in Saudi Arabia, both sellers and buyers in Saudi can benefit from this win-win solution. Electronic invoicing allows for generating invoices, credit notes, and debit notes in a structured and secured electronic format using a complaint e-invoice software.

Before we get to know the different e-invoice formats, let’s understand what it takes to call an invoice a complaint e-invoice.

Identifying the right format of your e-invoice

So, you should wonder first about the main format of an invoice and what is considered as an electronic invoice, and what is not!

Well, this is a good question to ask and the answer is very easy:

According to Zakat, Tax and Customs Authority (ZATCA) e-invoicing regulations, a tax invoice that is generated in a structured electronic format through electronic means is only considered an e-invoice. We are talking here about an invoice that has been issued and distributed only in an electronic way. No paper, printing, paper copy, or scan processes are included in issuing e-invoices.

A paper invoice that is converted into an electronic format through copying, scanning, or any other method is NOT considered an electronic invoice. Also, an invoice created by word processing or graphic software is NOT considered an e-invoice. Invoices created by e-invoicing systems and in the correct format is only considered compliant electronic invoice.

e-Invoice formats in Saudi

In Saudi VAT, two types of invoices are issued on making taxable supplies. The first is ‘Tax invoice’ and the second is ‘Simplified invoice.’ If you are selling to another business (B2B model),  you will need to issue a tax e-invoice. If you are selling to individual customers (B2C model), you will need to issue a simplified tax invoice.

Both tax invoices and simplified invoices are covered under the scope of e-invoicing, meaning businesses should ensure that e-invoicing guidelines are followed when issuing such invoices.

Let’s start with the tax invoice

e-invoice format for tax invoice

Electronic tax invoices for the first phase have the same requirements as regular tax invoices. In addition to the buyer’s VAT number, if registered under VAT, a QR code may be added optionally.

QR code here means the type of matrix barcode, with a pattern of black and white squares that is machine-readable by a QR code scanner or the camera of smart devices to enable basic validation of electronic invoices and electronic notes.

Tax e-invoice format

A sample tax e-invoice format generated from TallyPrime

e-invoice format for simplified tax invoice

If you sell to individual customers in Saudi Arabia, you can issue a simplified invoice. Also, if the supply value does not exceed SAR 1,000, a simplified tax invoice can be issued

Electronic simplified tax invoices for the first phase have the same requirements as regular simplified tax invoices; however, it is mandatory to include QR code on simplified e-invoices.

Simplified Tax E-invoice format

A sample simplified e-invoice format generated from TallyPrime

Here are the mandatory fields for an e-invoice:

1. Invoice Type: Need to mention that it is a simplified tax invoice in its document title.
2. Invoice Identifiers: Identifiers that are distinct to each simplified e-invoice, such as Invoice Reference Number (IRN), Universally Unique Invoice Identifier (UUID), etc.
3. Date: Needs to contain the date and time of its generation.
4. Seller Identification: A simplified e-invoice needs to contain fields that assist in seller identification, such as name, address, VAT registration number, etc.
5. Buyer Identification: Needs to contain details of the buyer to whom the invoice has been issued, such as name, buyer ID etc.
   Note: for simplified e-invoice, ZATCA only requires the addition of the buyer's name.
6. Line Items: This field states the description of goods and services including unit price, quantity, discounts, VAT total, tax code and subtotals.
7. Totals: The invoice needs to state the total amount to be charged and the totals for discounts and VATs.
8. Payment Terms: This field should specify if the mode of payment
9. Notes: These are inserted in every invoice to capture fields other than those covered above.
10. Cryptographic Stamp: Added on e-invoice to ensure authenticity of origin and integrity of the content.

Difference between tax and simplified e-invoice formats

So, if you are thinking about which e-invoice format your business should issue, you just need to identify the business model. This will help to know if you need to issue a tax e-invoice or a simplified tax e-invoice. To make it easy, we have summarised the differences in the below table.

How TallyPrime can help you in e-invoicing?

TallyPrime is qualified by ZATCA (GAZT) as a compliant e-Invoicing (FATOORA) software. From generating e-invoices instantly to storing and keeping track of them through the e-invoicing report, TallyPrime takes care of every little detail to bring you the most delightful experience.

Following are e-invoicing features of TallyPrime

• Generate an e-invoice in the flow of recording the invoice or do it anytime from the reports
• Supports e-invoices for a tax invoice, simplified invoice, debit notes and credit notes
• As you record your invoices, TallyPrime is designed to archive the invoice details in XML format, which is a mandatory requirement to be a compliant e-invoice solution
• Once the invoice is recorded, the system restricts further edits or alteration, ensuring it is tamper-proof
• Exclusive e-invoice reports and event log gives you a complete view of e-invoice activities and complete history of transactions

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