August 5, 2024
2024-1493 Saudi Arabia announces 14th 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 14th wave of Phase 2 e-invoicing integration.
- Taxpayers resident in Saudi Arabia, with a taxable turnover above SAR5m during the calendar year 2022 or 2023, should comply with the Phase 2 e-invoicing requirements that are effective from 1 February 2025.
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Executive summary On 26 July 2024, Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) announced on its website that taxpayers resident in Saudi Arabia, with a taxable turnover exceeding five million Saudi Riyal (SAR5m) during calendar year 2022 or 2023 will fall within the 14th 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 issued Decision No. (1446-99-82) dated 11/01/1446AH on 26 July 2024, which was published in the Official Gazette, Issue No. 5040, Page 11, and mentions that taxpayers coming under the 14th wave should comply with the Phase 2 e-invoicing requirements between 1 February 2025 and 30 April 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 13 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 June 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 | 1212 | Turnover of more than SAR10m during calendar year 2022 or 2023 | 1 December 2024 to 28 February 2025 | 1313 | Turnover of more than SAR7m during calendar year 2022 or 2023 | 1 January 2025 to 31 March 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 14th wave of Phase 2 e-invoicing integration, to go live within the period between 1 February 2025 and 30 April 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 14 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. 12 See EY Global Tax Alert, Saudi Arabia announces 12th wave of Phase 2 e-invoicing integration, dated 28 May 2024. 13 See EY Global Tax Alert, Saudi Arabia announces 13th wave of Phase 2 e-invoicing integration, dated 8 July 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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