This phase will comprise businesses whose VAT-excluded sales surpass SR1.75 million ($466,000) in either 2022 or 2023, Companies meeting this requirement will have to combine their e-invoicing systems with ZATCA's Fatoora platform by September 30, 2025 at least.

Phase Two of E-invoicing, or the Integration Phase, expands on the foundation set in the Generation Phase (Phase One), Phase Two brings more sophisticated integration needs while the Generation Phase concentrated on moving companies to electronic invoicing systems and guaranteeing compliance with basic criteria, These comprise using a consistent invoice template, linking taxpayers' e-invoicing solutions straight to the Fatoora platform, and incorporating extra fields for compliance. This stage is meant to improve openness, effectiveness, and regulatory control.

ZATCA has used a phased deployment strategy to help with the changeover, There will be waves of the Integration Phase. each aimed at particular taxpayers depending on predefined criteria, Companies chosen for each wave will be informed at least six months before their planned integration date, giving plenty of time to ready and modify their systems, This staggered approach is meant to guarantee a seamless transition and let ZATCA offer impacted companies focused help and direction.

A major element of Saudi Arabia 's larger ambition for digital transformation and economic growth is ZATCA's project, The authority has underlined the favorable results of the Generation Phase, launched on December 4, 2021, Businesses were obliged during this period to stop using handwritten bills or invoices created with non-compliant software, including text editors or spreadsheets programs, Rather, they were required to install e-invoicing systems that could create and save electronic invoices with certain fields like QR codes and other designated information.

A more strong and compliant invoicing system all throughout the Kingdom was made possible by the Generation Phase, ZATCA has commended taxpayers for their great understanding of Phase One criteria and fast adoption of them, which greatly helped it to be successful. This phase enhanced consumer protection by raising openness in business interactions, therefore simplifying tax compliance.

The next turn on this transforming road is the Integration Phase. ZATCA seeks to improve tax reporting accuracy and dependability by tying companies' e-invoicing systems straight to the Fatoora platform. Furthermore projected to be strengthened audit capacities, lower tax evasion risk, and increase general tax administration efficiency are the new criteria.

Saudi Arabia's dedication to create a technologically integrated economy includes this project. The Kingdom is projecting leadership in the acceptance of creative regulatory methods by using technology to improve its tax and customs infrastructure, This approach depends much on e-invoicing, which lays the groundwork for more sophisticated digital solutions down road.

Companies touched by the Integration Phase are advised to start getting ready early, This covers assuring compliance with the new format and field criteria and updating their invoicing systems to satisfy technical criteria needed for integration, ZATCA promised to offer tools and direction to help companies fulfill their responsibilities.

Phase Two of E-invoicing ultimately emphasizes Saudi Arabia's dedication to digital transformation and economic modernization, ZATCA is setting the foundation for a more transparent, compliant, and efficient tax system by extending the success of the Generation Phase, Along with supporting the Kingdom's economic objectives, this program strengthens consumer protection and builds confidence in its legislative system, Businesses will be very important in determining a more linked and strong economic scene as they adjust to these developments.

Saudi Tax Authority announces updates to e-invoicing system

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