In 2024, the e-invoicing system in Saudi Arabia entered a crucial phase with the implementation of the ninth wave of Phase 2, initiated by the Zakat, Tax and Customs Authority (ZATCA). This phase marks a significant step in the digitization and modernization of the country’s tax system. In this article, we will take a closer look at the criteria and expectations set for businesses that are part of the ninth wave of integration.
Criteria for the ninth wave
According to information published by ZATCA, as well as analyses from Ernst & Young and TPA Global, the ninth wave of Phase 2 e-invoicing focuses on businesses meeting specific turnover criteria. Businesses registered in Saudi Arabia with a taxable turnover exceeding 30 million Saudi Riyals (SAR) in the calendar year 2021 or 2022 are required to meet the requirements of this phase, effective from June 1, 2024.
Expectations for businesses
System Integration
Businesses included in the ninth wave will need to integrate their invoicing systems with ZATCA’s e-invoicing platform (Fatoora). This means their systems must be capable of generating, transmitting, and storing e-invoices in compliance with ZATCA’s guidelines.
Compliance with regulations
A key element is compliance with ZATCA’s e-invoicing regulations. Businesses must ensure that their e-invoices meet all required standards and formats, including appropriate data elements and digital security.
Preparation and testing
Businesses should conduct appropriate testing of their systems to ensure they are fully compatible with ZATCA’s requirements. This includes testing the generation of e-invoices, their transmission to ZATCA, and storage.
Training and awareness
It is important for businesses to train their employees on the new e-invoicing system. Understanding the process and requirements is key to ensuring a smooth transition and avoiding errors.
Challenges and opportunities
Technological Challenges
Integrating with an advanced e-invoicing system can be challenging, especially for businesses that have relied on traditional invoicing methods.
Opportunities for Improvement
However, transitioning to e-invoicing also offers opportunities for improving business processes, increasing efficiency, and enhancing tax compliance.
Collaboration with Solution Providers
Businesses can benefit from collaborating with IT solution providers who specialize in e-invoicing to facilitate the integration process and ensure compliance with ZATCA’s requirements.
Conclusion
The ninth wave of ZATCA e-invoicing integration in 2024 represents an important step towards the full digitization of the tax system in Saudi Arabia. Businesses need to be aware of the new requirements and prepare for the changes to ensure smooth implementation and avoid potential issues. With proper preparation, e-invoicing can bring significant benefits, streamlining processes and increasing financial transparency.
