May 2, 2023 Saudi Arabia announces fourth wave of Phase 2 e-invoicing integration
Executive summary On 28 April 2023, the Saudi Arabia Zakat, Tax and Customs Authority (ZATCA) announced on its website that taxpayers resident in Saudi Arabia that have a taxable turnover above SAR150m during the calendar year 2021 or 2022 will fall within the fourth wave of Phase 2 e-invoicing integration and should comply with the Phase 2 requirements. The ZATCA will notify the impacted taxpayers in preparation for linking and integrating their electronic invoicing systems with the ZATCA's e-invoicing platform (Fatoora). Further, the ZATCA Governor has issued Decision No. (58897) dated 09/22/1444 AH, which was published in the Official Gazette on 28 April 2023 and mentions that the fourth wave of affected taxpayers should comply with the Phase 2 e-invoicing requirements within the period 1 November 2023 through 29 February 2024. Detailed discussion Background On 4 December 2020, the ZATCA introduced e-invoicing in Saudi Arabia, releasing the E-Invoicing Regulation. E-invoicing in Saudi Arabia is being implemented in two phases:
*See Tax Alert 2022-5611. **See Tax Alert 2022-6263. ***See Tax Alert 2023-5357. Resident businesses falling under the above waves have already been notified by the ZATCA to comply with Phase 2 of e-invoicing as per their applicable timelines. Overview of the ZATCA announcement Based on the latest announcements, the ZATCA will begin notifying taxpayers who fall within the fourth wave of Phase 2 e-invoicing integration, to go live within the period 1 November 2023 to 29 February 2024. Implications Resident businesses should comply with the obligations of Phase 2 e-invoicing integration based on the notification received from the ZATCA and undertake the relevant steps in making the required changes in their IT systems. Taxpayers should comply with the Phase 2 requirements in line with the e-invoicing regulation to preclude possible penalties. Taxpayers that do not fall within the first four waves of Phase 2 e-invoicing integration should monitor future announcements by the ZATCA to learn when the integration timeline period applicable to them arises as part of subsequent waves. ____________________________ For additional information with respect to this Alert, please contact the following: EY Consulting LLC, Dubai
Ernst & Young Professional Services (Professional LLC), Riyadh
Ernst & Young Professional Services (Professional LLC), Jeddah
Ernst & Young Professional Services (Professional LLC), Al Khobar
Ernst & Young — Middle East, Bahrain
Ernst & Young LLP (United States), Middle East Tax Desk, New York
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor | |||||||||||||