ZATCA E-Invoicing Integration (Phase 2) Solution: All You Need to Know

​​​​​​What is E-Invoicing (FATOORAH)?

Electronic invoicing is a procedure that aims to convert the issuing of paper invoices and notes into an electronic process that allows the exchange and processing of invoices, credit notes & debit notes in a structure electronic format between buyer and seller through an integrated electronic solution.

What is an electronic invoice?

A tax invoice that is generated in a structured electronic format through electronic means. A paper invoice that converted into an electronic format through coping, scanning, or any other method is not considered an electronic invoice.

Types of E-Invoices

Tax Invoice

An invoice that is usually issued by a Business to another Business (B2B), containing all tax invoice elements.​

Simplified Tax Invoice

An invoice that is usually issued by a Business to consumer (B2C) containing all simplified tax invoice elements.​

​ Guidelines for e-invoicing in KSA

The e-invoicing provisions will apply to all taxable goods and services that are subject to VAT (whether standard or zero rate).

All VAT-registered business owners (except non-resident taxable people) within KSA who make sales within and outside KSA have to adopt the e-invoicing process. If you are a third party in KSA issuing a tax invoice on behalf of a taxable person, you will have to adopt the e-invoicing process too. For instance, an accounting firm that issues invoices on behalf of a textile seller would be responsible for these regulations.

E-invoicing is mandatory for all B2B, B2G, and B2C transactions. While issuing an e-invoice to a buyer, you should provide a printed copy as well.

The invoices have to be in Arabic. You may opt to translate them or add another language, but it is mandatory to issue the e-invoice in Arabic.

How does E-Invoicing (FATOORAH) work?

The Zakat, Tax and Customs Authority (ZATCA) in the Kingdom of Saudi Arabia (KSA) has rolled out regulations mandating businesses to adopt an e-invoicing process in two phases, starting on December 4, 2021.

For Phase 1, all taxpayers (excluding non-resident taxpayers), and any other parties issuing tax invoices on behalf of suppliers subject to VAT, electronic invoice issuance will be very similar to invoices generated prior to 4 Dec 2021, with invoices issued thr​ough a compliant electronic solution and including additional fields depending on the type of the transaction.

For Phase 2, enforceable starting January​ 1st, 2023 in waves, the electronic solution must be integrated with ZATCA’s systems and e-invoices should be generated in the required format.​

Phase 2 is further broken down into Waves based on Annual Revenue slabs.

Key Differences between Phase 1 and Phase 2:

What does ECS has to offer?

We, at ECS, have designed a comprehensive hassle-free solution, specifically for Oracle ERP, that will help you seamlessly integrate with the FATOORAH portal as per ZATCA Phase 1 and 2 regulations.

ECS offers a comprehensive custom-made solution that can cater to all your needs, be it B2B or B2C.

ECS Oracle – ZATCA Integration Solution is custom developed by our experts from Oracle CoE, and is designed to give you an end-to-end automated process covering everything from Invoice Generation to Compliance check to XML file storage to Clearance and e-delivery of PDF Invoices to end customers.

Irrespective of your Business type, be it B2B or Retail, our Solution will have you covered on both.

Key Benefits:

  • Quick n Easy Generation: With robust APIs, e-Invoices can be generated in seconds or even quicker
  • Analytics & Reporting: Get detailed reports indicating which invoices are cleared / have warning / errored.
  • Custom Invoice Templates: We provide built-in compliance-friendly Invoice templates (including Arabic language). Existing templates can also be customized.
  • No Additional Costs: We offer a comprehensive solution that does not include any hidden / additional costs for Infrastructure, Network, Operational etc

Figure 1: ECS Oracle – ZATCA Integration Solution Flowchart (to be titled on ECS figure)