All you need to know about e-invoice
The electronic invoice system is a system that aims to transform the issuance of paper invoices and notices into electronic operations.
Through it, it allows the exchange of invoices and debit and credit notices and their processing in an organized electronic form between sellers and buyers in an integrated electronic format.
The General Authority for Zakat, Tax and Customs is working to implement electronic invoicing (invoice) on a mandatory basis as of December 4, 2021 AD, for all taxpayers subject to value added tax.
In December 2020, the authority announced the bylaw and the basic requirements for issuing and keeping them via an electronic system.
The government agency responsible for this (the General Authority for Zakat, Tax and Customs) aims through the implementation of the project to raise the tax compliance rate, reduce the volume of hidden economy transactions and combat commercial cover-up.
it pointed out that most of the violations that it has monitored since the introduction of value-added tax in Saudi Arabia are caused by manual paper invoices.
Some invoices are incomplete, and the terms are not clear, in addition to the fact that human error is very likely, such as calculating a lower or higher value for value added tax, for example.
They are issued and saved in an electronic format organized through an electronic system and contain certain requirements.
As for handwritten or scanned ones, they do not match the specifications and standards.
There are two types of them: tax and simplified tax What is the difference between them?
1- The invoice that is often issued from one organization to another organization, and contains all required items.
2- An invoice that is often issued from a company to an individual, and contains the main elements of a simplified tax invoice.
Electronic invoice stages
It will be applied in two phases, the first phase “issuance phase” from December 4, 2021 AD to all those registered in the tax and those on behalf of the taxpayer.
It will be similar to the issuance of invoices today, but through compatible electronic billing systems, and the invoice will include all the required items based on their type.
First stage (release stage):
After scanning the code, the following items should appear:
Supplier tax registration number.
Date and time (invoice timestamp).
Total value added tax.
Total invoice or notice.
A stamp consisting of a black and white square pattern that can be read by a QR code scanner or smart device camera to ensure that the information on the invoice is correct.
As a trader, how do you comply with the requirements of the first stage?
You must use an electronic billing system:
Ensure that your organization is equipped with a system that complies with the requirements for the first stage (issue stage).
You should also contact the billing system provider or your technical team to ensure that the technical and technical requirements of your organization are met.
And with restrictions, we guarantee you an easy transfer of the electronic invoice in your organization by providing all its requirements in accordance with the directives of the General Authority for Zakat, Tax and Customs.
Ways to export and save the electronic invoice:
Ensure that it is issued and saved through electronic billing systems and that no handwritten invoices or a text editor are issued.
Things you should avoid:
Issuing the invoice manually
Issuance of an invoice that does not comply with the requirements in force in the KSA
Use an incompatible system.
Deletion or modification after its issuance.
How do you prepare to apply it?
- Visit the website of the Zakat, Tax and Customs Authority – Zatca.gov.sa
- Understand the elements and requirements
- Install or update the system at the organization
- Ensure that it is tested and that it is released before the mandatory date
- Ensure the readiness of your employees to deal with the new system
How do store owners apply it?
They can do this by introducing it to their business through accounting software and systems providers that meet all the technical conditions required in the tax invoice.
We are also in Qoyod, we are keen to provide all its features as a property for all customers and there is no need to pay any additional costs to use it.
What would it look like?
It will include a QR code (or QR code), which the accounting software you use will generate for you with each invoice.
It is a stamp of black and white squares that can be read automatically through a dedicated scanner or by the camera of smart devices to ensure the validity of invoices.
It also includes:
- Invoice serial number
- Issue date
- Name and address of the Organization
- Tax Number
- Description of the item or service
- Unit price
- The total amount does not include VAT
- VAT amount
- Finally, the total invoice value inclusive of VAT
- In addition to the directives of the General Authority for Zakat, Tax and Customs, Qoyod advises avoiding issuing invoices manually or via text editors.
- Or issuing invoices that do not include the requirements, and using an accounting system or program that is not compatible with their requirements. The Authority also notes that it will not be deleted after its issuance.
- The seller must issue the invoice via an electronic billing system that complies with the requirements of the first stage.
- The invoice contains the items that are required to be included in the tax invoice.
- The buyer receives a copy of the invoice.
Those subject to the regulation must abide by the following obligations:
- Inform the Authority, through the means specified by the Authority, of any accidents, technical malfunctions, or urgent matters that hinder the process of issuing electronic notices or the process of linking electronic billing systems.
- Furthermore, the taxable person must notify the authority as soon as the holiday or emergency has passed and the tax invoices and related notifications are to be excluded.
- And to send and share the billing data or notices of transactions that took place during the period of the accident, technical malfunction or emergency matter in an electronic way and share it with the competent authorities.
- Not to use any technical solutions that do not conform to the specifications and requirements specified in the decision regarding controls, requirements, technical specifications and procedural rules necessary to implement the provisions of the electronic billing regulation.
- The means will be provided to find the Technical Solution Providers, who have declared their compliance or have been verified on the Authority’s website within a sufficient time period to allow the technical requirements to be removed.
- Registering the technical solution that conforms to the specifications and requirements used in the issuance of simplified electronic invoices and related notifications in accordance with the mechanisms and controls specified in the decision related to electronic controls, specifications and requirements.
- Preserve the encryption seal and its associated components in a safe manner, protect it from copying or illegal use, and not use it for purposes other than those for which it is intended.
- Linking with the Authority’s electronic billing systems starting from the date specified in the decision related to the controls, requirements, technical specifications and procedural rules necessary to implement the provisions of the billing regulation and the electronic rules.
The authority will also notify the target groups at each stage at least six months before the date set for the connection.
This is to include the application of the project to all sectors and industries in the Kingdom of Saudi Arabia to achieve the desired goals.
Find out more details about the electronic bill through the special issue of Qoyod electronic magazine.
You can link and activate with Qoyod before the specified date with the click of a button. All you have to do is contact customer service and follow the simple instructions to configure your organization in the best way and achieve the requirements of financial digital transformation in the Kingdom for organizations and companies.
And because we are in Qoyod always proactive to keep pace with what is new, we are keen to connect our existing and new clients with the most important accounting features that each project needs in various sectors to develop their businesses and move them to higher levels in order to serve our country and achieve our vision.