What is Phase 2 of e-Invoicing in KSA?

This phase signifies a significant step towards a more modern and efficient tax system, enhancing transparency and efficiency for taxpayers and the ZATCA alike. Through the integration of technology and proactive communication, the tax landscape is set to evolve for the benefit of all stakeholders involved.

Let’s break down the information into key points

  • Implementation Date: The forthcoming phase of tax reform is scheduled to commence on January 01, 2023.
  • Staged Implementation: This phase will be executed in a series of stages, each targeting specific segments of taxpayers. The ZATCA (Zonal Taxation and Compliance Authority) will play a crucial role in informing taxpayers about the applicability of each stage, providing a generous six-month advance notice.
  • Integration of Billing Software: The primary focus of this phase is the integration of taxpayers’ billing software with the ZATCA system. This integration aims to facilitate the seamless sharing of data and information.
  • Verification and Validation: When taxpayers generate invoices using their own software, these documents will be transmitted to ZATCA for thorough verification and validation, ensuring compliance with tax regulations.
  • Real-Time System: Notably, this phase will operate in real-time. Sellers must obtain clearance for their invoices from the ZATCA system before sharing them with customers. This real-time exchange minimizes discrepancies and inaccuracies.
  • Simplified Invoices: For simplified invoices, sellers have a strict reporting deadline. These invoices must be reported to ZATCA within 24 hours of their generation, emphasizing the importance of timely compliance.

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