Within the framework of the Kingdom’s Vision 2030 and support for digital transformation, the Zakat, Tax and Customs Authority announced the implementation of the second phase of the electronic invoicing system starting from January 2023. This phase, known as the “Integration Phase,” is a pivotal step toward enhancing transparency and reducing administrative costs through the use of advanced electronic systems such as the Riv-ERP system.
This guide provides a detailed explanation of the second phase requirements and how to comply with them, highlighting the role of Riv-ERP in facilitating electronic invoice management and ensuring full compliance with the systems.
What Is the Second Phase of Electronic Invoicing?
The second phase, known as the “Integration Phase,” aims to link electronic invoicing systems with the “Fatoora” platform of the Zakat, Tax and Customs Authority. This phase enables companies to exchange digital data instantly, contributing to improved operational efficiency and achieving full tax compliance.
The Riv-ERP system provides a strong infrastructure for this phase by integrating cloud solutions that allow issuing, sharing, and approving invoices easily through the Authority’s platforms.
What Companies Are Targeted?
The implementation of the second phase includes all companies subject to the first phase, but it is implemented in gradual stages according to annual revenue. Targeted companies can be classified according to the groups specified by the Authority, starting with companies achieving revenues exceeding 3 billion SAR annually, down to smaller companies by 2025.
Steps for Implementation Using Riv-ERP
Phase One:
- Issuing electronic invoices and saving them electronically.
- Delivering a copy to the customer digitally.
Phase Two:
- Linking the system to the “Fatoora” platform to send data.
- Ensuring all required fields are included for each type of invoice.
- Approving invoices from the Authority within the specified timeframe (24 hours for simplified invoices).
Invoice items/entries, showing alongside each item: quantity, unit price, tax value per item, tax rate applied to each item, and total unit price with tax.
- Total invoice excluding tax.
- Total VAT value on the invoice.
- Total invoice including tax.
- A unique sequential invoice number.
- QR code.
- Universally unique invoice identifier (UUID).
Requirements of the Second Phase of Electronic Invoicing
To ensure full compliance with the second phase, companies must meet the following requirements:
- An internet-connected electronic invoicing system: Riv-ERP is an ideal choice that provides seamless integration with digital systems.
- Integration with the “Fatoora” platform: Riv-ERP allows direct linking with the Zakat, Tax and Customs Authority.
- Using approved formats: such as XML and PDF/A3 embedded with XML format.
- Including additional required fields: such as the VAT registration number and the QR code.
Timeline Table for the Second Phase
| Group | Annual Revenue (SAR) | Implementation Date |
|---|---|---|
| First | More than 3 billion | January 1, 2023 |
| Second | 500 million to 3 billion | July 1, 2023 |
| Third | 250 million to 500 million | October 1, 2023 |
| Fourth | Less than 250 million | January 1, 2024 |
Technical Requirements of the Electronic Invoice
- Seller’s name and tax registration number.
- Store address and sequential invoice number.
- Invoice items, with quantity, unit price, tax rate, and total invoice including tax.
- QR code.
- Universally unique invoice identifier (UUID).
Penalty Imposed in Case of Non-Compliance with the Second Phase of Electronic Invoicing
The Zakat, Tax and Customs Authority strictly enforces full compliance with electronic invoicing requirements and imposes financial and administrative penalties on violators, including:
- Financial fines starting from 5,000 SAR, increasing with repeated violations.
- Suspension of business activities for non-compliant taxpayers.
- Restrictions on government services, including tax registration and data updates.
To protect your business and ensure compliance with the laws, it is recommended to use a certified system such as Riv-ERP to manage electronic invoices according to the second phase.
Frequently Asked Questions About the Second Phase of Electronic Invoicing
What is the difference between a tax invoice and a simplified tax invoice?
A tax invoice is used between businesses (B2B) and requires approval from the Zakat Authority before sending. A simplified tax invoice is used between businesses and customers (B2C) and is sent to the Zakat Authority within 24 hours of issuance.
Can I rely on any electronic invoicing system?
The system must be certified by the Zakat, Tax and Customs Authority and must support linking and integration with the “Fatoora” platform.
How can I ensure my invoicing system complies with the second phase?
The Riv-ERP system can provide a guarantee of full compliance with the Authority’s requirements, while providing local technical support and the necessary guidance.
When can the second phase be applied to my company?
Implementation dates depend on the size of annual revenue subject to VAT, as shown in the timeline table above.
If you are looking for an integrated system to implement electronic invoicing efficiently and easily, Riv-ERP is the ideal solution. The system provides full support for linking and integration with the Zakat Authority, and supports all requirements of the second phase.
Start now and achieve seamless compliance with Riv-ERP! Do you need more details? Contact us for a free consultation on implementing electronic invoicing using Riv-ERP.
Why Is the Riv-ERP System Your Ideal Choice?
- A system certified by the Zakat and Tax Authority.
- Full support for linking with the “Fatoora” platform.
- Suitable for all sectors such as trade, industry, services, and retail.
- Providing specialized local technical support.
Start now with Riv-ERP to achieve compliance with the requirements of the second phase of electronic invoicing with complete ease.
