Saudi Arabia is introducing mandatory e-invoicing from December 2021. Saudi businesses must have all the required processes in place by 4 December 2021.
Businesses must prepare invoices in XML and clear these through the Saudi tax authority’s online portal before the invoices can be issued to customers.
What does Saudi e-invoicing compliance look like?
To comply with e-invoicing, businesses must ensure they have the appropriate software in place. Staff will also require training in the system. Companies must also take due care to ensure VAT is appropriately applied to each invoice.
The programme’s second phase will add further digital requirements. Those requirements will likely include a cryptographic stamp to ensure the integrity of the invoice. Businesses should plan ahead for phase 2 requirements.
VAT was first introduced to Saudi Arabia in 2018. Since then, Saudi Arabia’s authorities have worked to develop a robust modern VAT system.
What is the purpose of e-invoices?
Saudi Arabia’s e-invoicing system enables tax authorities to more effectively monitor transactions and reduce VAT evasion. Authorities also hope e-invoicing will ultimately make transactions simpler and more efficient.
Saudi Arabia’s move to digital invoicing is in line with the global paradigm shift in VAT compliance.
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