May 28, 2024
2024-1072 Saudi Arabia announces 12th wave of Phase 2 e-invoicing integration - Saudi Arabia’s Zakat, Tax and Customs Authority has announced the criteria for taxpayers to be included in the 12th wave of Phase 2 e-invoicing integration.
- Taxpayers resident in Saudi Arabia, with a taxable turnover above SAR10m during the calendar year 2022 or 2023, should comply with the Phase 2 e-invoicing requirements that are effective from 1 December 2024.
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Executive summary On 24 May 2024, the Saudi Arabia Zakat, Tax and Customs Authority (ZATCA) announced on its website that taxpayers resident in Saudi Arabia, with a taxable turnover exceeding 10m Saudi Riyal (SAR10m) during calendar year 2022 or 2023, will fall within the 12th 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. (542-99-1445) dated 13/11/1445AH, which was published in the Official Gazette on 24 May 2024 and mentions that the taxpayers coming under the 12th wave should comply with the Phase 2 e-invoicing requirements between 1 December 2024 and 28 February 2025, inclusive of both dates. 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: - Phase 1, effective from 4 December 2021, mandates generation of e-invoices and e-notes, including related processing and record keeping.
- Phase 2, effective from 1 January 2023, mandates integration of a taxpayer’s system with the ZATCA, along with the transmission of e-invoices and e-notes to the ZATCA. This phase is being implemented in waves. The criteria and timelines for the first 11 waves, which were previously announced, are:
Wave | Criteria | Timeline | 11 | Turnover of more than SAR3b during calendar year 2021 | 1 January 2023 to 30 June 2023 | 22 | Turnover of more than SAR500m up to SAR3b during calendar year 2021 | 1 July 2023 to 31 December 2023 | 33 | Turnover of more than SAR250m during calendar year 2021 or 2022 | 1 October 2023 to 31 January 2024 | 44 | Turnover of more than SAR150m during calendar year 2021 or 2022 | 1 November 2023 to 29 February 2024 | 55 | Turnover of more than SAR100m during calendar year 2021 or 2022 | 1 December 2023 to 31 March 2024 | 66 | Turnover of more than SAR70m during calendar year 2021 or 2022 | 1 January 2024 to 30 April 2024 | 77 | Turnover of more than SAR50m during calendar year 2021 or 2022 | 1 February 2024 to 31 May 2024 | 88 | Turnover of more than SAR40m during calendar year 2021 or 2022 | 1 March 2024 to 30 June 2024 | 99 | Turnover of more than SAR30m during calendar year 2021 or 2022 | 1 March 2024 to 30 September 2024 | 1010 | Turnover of more than SAR25m during calendar year 2022 or 2023 | 1 October 2024 to 31 December 2024 | 1111 | Turnover of more than SAR15m during calendar year 2022 or 2023 | 1 November 2024 to 31 January 2025 |
The ZATCA has already notified resident businesses falling under the above waves to comply with Phase 2 of e-invoicing as per their applicable timelines. ZATCA announcement Based on the latest announcements, the ZATCA will begin notifying taxpayers who fall within the 12th wave of Phase 2 e-invoicing integration, to go live within the period between 1 December 2024 and 28 February 2025, inclusive of both dates. Implications Resident businesses should comply with the obligations of Phase 2 e-invoicing integration based on the ZATCA notification and undertake the relevant steps in making the required changes in their information technology systems. Taxpayers should comply with the Phase 2 requirements in line with the e-invoicing regulation to preclude possible penalties. Taxpayers who do not fall within the first 12 waves of Phase 2 e-invoicing integration should monitor future announcements from the ZATCA on the integration timeline period applicable to them in subsequent waves. | * * * * * * * * * * |
Endnotes1 See EY Global Tax Alert, Saudi Arabia releases final e-invoicing regulations for Phase 2, dated 24 June 2022. 2 See EY Global Tax Alert, Saudi Arabia announces second wave of Phase 2 e-invoicing integration, dated 28 December 2022. 3 See EY Global Tax Alert, Saudi Arabia announces third wave of Phase 2 e-invoicing integration, dated 24 March 2023. 4 See EY Global Tax Alert, Saudi Arabia announces fourth wave of Phase 2 e-invoicing integration, dated 2 May 2023. 5 See EY Global Tax Alert, Saudi Arabia announces fifth wave of Phase 2 e-invoicing integration, dated 30 May 2023. 6 See EY Global Tax Alert, Saudi Arabia announces sixth wave of Phase 2 e-invoicing integration, dated 16 June 2023. 7 See EY Global Tax Alert, Saudi Arabia announces seventh wave of Phase 2 e-invoicing integration, dated 31 July 2023. 8 See EY Global Tax Alert, Saudi Arabia announces eighth wave of Phase 2 e-invoicing integration, dated 24 August 2023. 9 See EY Global Tax Alert, Saudi Arabia announces ninth wave of Phase 2 e-invoicing integration, dated 21 November 2023. 10 See EY Global Tax Alert, Saudi Arabia announces 10th wave of Phase 2 e-invoicing integration, dated 4 April 2024. 11 See EY Global Tax Alert, Saudi Arabia announces 11th wave of Phase 2 e-invoicing integration, dated 29 April 2024. | | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: 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 LLP (United States), Middle East Tax Desk, New York | | Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor |
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