¶ Document and Transaction Types
In compliance with KSA VAT law, our e-invoicing platform facilitates the issuance of two distinct document types: the Standard Tax Invoice and the Simplified Invoice, alongside their associated Credit Notes and Debit Notes.
A Standard Tax Invoice is mandated for the majority of B2B (Business-to-Business) and B2G (Business-to-Government) transactions, adhering to the specific fields outlined in KSA VAT Law. This comprehensive invoice type ensures compliance with regulatory requirements and facilitates seamless transactions within the business and government sectors.
Conversely, a Simplified Tax Invoice is primarily utilized for B2C (Business-to-Consumer) transactions, featuring fields specified in the VAT Implementing Regulations. This streamlined invoice format caters to consumer-facing transactions, simplifying the invoicing process while ensuring regulatory compliance.
¶ Standard Tax Invoice
A Standard Tax Invoice serves as the official documentation for the majority of B2B and B2G transactions, encompassing specific fields mandated by KSA VAT Law. While taxpayers have the flexibility to generate invoices in various electronic formats, it's imperative to note that a paper invoice converted into an electronic format through methods like copying or scanning does not meet compliance standards for E-Invoices.
During Phase 1 (Generation Phase), taxpayers are required to produce a Standard Tax Invoice in electronic format utilizing a compliant E-Invoice Generation Solution (EGS), incorporating additional data fields as specified in Annex 2 of ZATCA E-Invoicing Resolution.
In Phase 2 (Integration Phase), this obligation extends to generating Standard Tax Invoices with the prescribed additional data fields outlined in Annex 2 of the E-Invoicing Resolution. These invoices must be generated using an EGS that is both compliant and onboarded. Furthermore, in Phase 2, Standard Tax Invoices must be presented in XML format or as a PDF/A-3 with embedded XML.
For Phase 2 submissions, Standard Tax Invoices should be transmitted in XML format, not PDF/A3, to the FATOORA Platform’s Clearance API. The FATOORA Platform undertakes validation checks to ensure compliance with XML Implementation Standards and performs additional referential checks. Upon successful validation, the FATOORA Platform clears the Standard Tax Invoice by affixing a Cryptographic Stamp and QR Code to the XML. The cleared XML is then returned to the taxpayer via APIs.
¶ Simplified Tax Invoice
A Simplified Tax Invoice is primarily utilized for B2C transactions and encompasses fields specified in the VAT Implementing Regulations as well as Annex 2 of the E-Invoicing Resolution. Additionally, taxpayers have the flexibility to issue Simplified Tax Invoices for B2B transactions if the value of Taxable Supplies is below 1,000 SAR. It's important to note that Simplified Invoices for B2C transactions can be issued for any value, even if the value of Taxable Supplies exceeds 1,000 SAR. However, this threshold of 1,000 SAR applies solely when the supplier opts to issue a Simplified Tax Invoice for B2B transactions.
Simplified Tax Invoices can be generated in any electronic format, but it's crucial to avoid converting paper invoices into electronic format through methods like copying or scanning, as this does not comply with E-Invoice regulations.
When electronically generated, Simplified Tax Invoices must be provided to buyers in printed form. Alternatively, upon mutual agreement between transaction parties, these invoices or associated notes can be shared with customers in electronic or other human-readable formats.
The generation of Simplified Tax Invoices necessitates adherence to specific requirements. These invoices must be created in XML format or as a PDF/A-3 with embedded XML. Taxpayers' EGS solutions must stamp the XML with a CSID issued by ZATCA and include a compliant QR Code in accordance with Phase 2 standards.
Upon generation, compliant Simplified Tax Invoices (after stamping and QR code application) must be promptly shared with the buyer in printed form. Alternatively, as agreed upon by transaction parties, they can be shared electronically or in other human-readable formats.
Taxpayers are required to submit Simplified Tax Invoices in XML format (not PDF/A-3) to the FATOORA Platform’s Reporting API within 24 hours of invoice generation. The FATOORA Platform validates compliance with XML Implementation Standards and conducts additional referential checks. Upon successful validation, the platform provides a successful response.
¶ Deciding on the Type of Invoice
¶ Transaction Types
ZATCA supports a variety of transaction types across mainly two document types. Below is an overview of the transaction types supported:
- Third-Party Invoice: This type of invoice is generated by a third party rather than the seller directly. It's commonly used when an intermediary is involved in the transaction process.
- Self-Billed Invoice: Typically applicable in B2B scenarios, this invoice is issued by the buyer instead of the supplier. While it does not alter the standard fields of an invoice, it must explicitly state that it is "self-billed."
- Nominal Invoice: Issued for the provision of goods without consideration, this invoice is usually used for promotional or goodwill items.
- Export Invoice: This invoice is issued when there is an export of goods or services. It is usually done for foreign customers and mainly caters to international sales transactions.
- Summary Invoice: Used for transactions that span over a period of time, this invoice summarizes sales and is typically used under certain invoicing arrangements between the seller and buyer.
For more information on the code that needs to be sent for each of these document types during API consumption, refer to the Appendix.