In a groundbreaking move towards modernizing its tax system and embracing digital transformation, Saudi Arabia has announced a series of waves that will revolutionize the way businesses manage their invoices. These waves, part of Phase 2 of the country’s e-invoicing initiative, are set to roll out gradually, impacting businesses of various sizes over the next year.
Wave 1: January 1st – June 30th, 2023
The journey begins with Wave 1, targeting taxpayers with annual taxable revenue exceeding 3 billion SAR in 2021. These businesses have taken the lead in adopting e-invoicing solutions, setting the stage for others to follow suit.
Wave 2: July 1st – December 31st, 2023
Wave 2 extends the scope, including taxpayers with annual taxable revenue above 0.5 billion SAR in 2021. This phase ensures that a broader spectrum of businesses joins the digital revolution.
Wave 3: October 1st, 2023 – January 31st, 2024
Wave 3 casts a wider net, encompassing taxpayers with annual taxable revenue above 250 million SAR in either 2021 or 2022. This inclusion ensures that mid-sized enterprises also embrace e-invoicing.
Wave 4: November 1st, 2023 – February 29th, 2024
Wave 4 lowers the threshold, targeting taxpayers with annual taxable revenue above 150 million SAR in either 2021 or 2022. Smaller enterprises are gradually brought into the e-invoicing fold.
Wave 5: December 1st, 2023 – March 31st, 2024
Wave 5 pushes the boundaries further, incorporating taxpayers with annual taxable revenue above 100 million SAR in 2021 or 2022. More businesses experience the benefits of electronic invoicing.
Wave 6: January 1st, 2024 – April 30th, 2024
Wave 6 brings onboard taxpayers with annual taxable revenue exceeding 70 million SAR in 2021 or 2022. The transformation reaches deeper into the business landscape.
Wave 7: February 1st, 2024 – May 31st, 2024
Wave 7 extends its reach to businesses with annual taxable revenue above 50 million SAR in 2021 or 2022. Smaller and medium-sized enterprises are now part of the digital evolution.
Wave 8: March 1st, 2024 – June 30th, 2024
The final wave, Wave 8, targets taxpayers with annual taxable revenue above 40 million SAR in 2021 or 2022. By the end of this phase, a significant portion of the business community will have embraced e-invoicing.
It’s important to note that these waves are part of Phase 2, known as the Integration phase. During this phase, technical and business requirements for electronic invoices and electronic solutions will be introduced, and these solutions will be integrated with the systems of the Zakat, Tax, and Customs Authority (ZATCA).
ZATCA’s proactive approach includes notifying taxpayers of their assigned wave at least six months in advance, providing ample time for preparation and adaptation.
As Saudi Arabia embarks on this ambitious journey towards digital transformation, businesses are urged to stay informed and prepared for their designated wave. Embracing e-invoicing not only ensures compliance with tax regulations but also unlocks the potential for increased efficiency and accuracy in financial operations.
The e-invoicing revolution is set to redefine how businesses operate in Saudi Arabia, fostering a more streamlined and technologically advanced business landscape for years to come. As these waves roll out, Saudi businesses are taking a significant step into the future of finance and taxation.
For more detailed information on Saudi Arabia’s e-invoicing initiative and the specific integration waves, please refer to the official announcement from the Zakat, Tax, and Customs Authority (ZATCA) https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/Roll-out-phases.aspx
Nice article. Lots of tax technology initiatives happening at GCC, specifically Saudi and UAE. Next 5 years are going to be a digital revolution here.