Providing your customers with invoices is an essential part of any business. However, some of them in KSA are using digital tools to ease such a task. Therefore, you should not set up a business without knowing everything about e-invoicing in Saudi Arabia.
Fortunately, you will find all you need to know about e-invoicing in Saudi Arabia. Furthermore, you will learn how to use it and what you should and should not do as a taxpayer. Hence, discover how to use e-invoicing software in Saudi Arabia by reviewing the following topics:
- What is e-invoicing?
- Why are several businesses using e-invoicing today?
- What benefits can you get as a taxpayer by using electronic invoicing?
- How can you use e-invoicing in KSA?
- Which regulations exist regarding e-invoicing in Saudi Arabia?
- How does the process of using e-invoicing in Saudi Arabia work?
- What should you do and not do as a taxpayer using e-invoicing software in Saudi Arabia?
- Where can you find more information about e-invoicing in Saudi Arabia?
What is e-invoicing?
Unequivocally, you cannot be a foreigner and set up a business in Saudi Arabia without thinking about your invoices. Assuredly, you could think it involves finding paper and printer suppliers. But the Kingdom of Saudi Arabia offers you another alternative: e-invoicing.
In essence, electronic invoicing is a procedure where you convert your paper invoices into an electronic process. Moreover, your debit and credit notes also can be a part of it. As a result, you can use an electronic format between you and your buyer.
Furthermore, any company can set up a ZATCA e-invoicing procedure regardless of its line of business. Hence, it is worth mentioning during your company registration process in Saudi Arabia. As you will learn here, it is a decision you will not regret.
Most importantly, you can discover that electronic invoices are a trending topic among businesses in Saudi Arabia. By all odds, you could wonder why this is happening. Luckily, our following subject will give you the answer you are seeking.
Why are several businesses using e-invoicing today?
Accountant services in the past implied filling up books by hand and using calculators. However, we are in a digital age when everything is becoming electronic. Logically, electronic invoicing is a clear example of it. So, let us show you why several businesses are using it today.
First and foremost, a business often sees e-invoicing in Saudi Arabia as a financial advantage. Indeed, you can save money by erasing the need for paper, invoicing equipment, and office materials. Consequently, you can direct your finances to other essential parts of your organization.
On the other hand, using e-invoicing software in Saudi Arabia can potentially speed up several processes in your company. For instance, it can give your legal services team a faster way to perform an audit. Remember, time is one of the most transcendental resources of your company.
Nonetheless, the main reason businesses prefer to issue an e-invoice in Saudi Arabia is because of the benefits it brings. In this sense, you can jump to our following topic to discover them. Above all, you can be sure your organization will get them in no time.
What benefits can you get as a taxpayer by using ZATCA e-invoicing?
The Zakat, Tax, and Customs Authority (ZATCA) strongly recommend implementing electronic invoicing. You could think it is because it simplifies receiving the withholding tax for them. However, it can give your business more benefits than you imagine. So, let us reveal to you some of them.
First, e-invoicing in Saudi Arabia allows your business to reduce hidden economic transactions. Moreover, you can also lower commercial concealment because it increases requirements related to invoice tracking. In other words, your accountants will thank you for it tremendously.
Furthermore, implementing an e-invoicing format in KSA will potentially enrich your customer experience. After all, it will digitalize your relationship with your consumers. Besides, it can also digitalize your relationship with your suppliers if they use such a system in the Kingdom.
In short, you will find several ways in which electronic invoices will help your organization. However, you will not get these benefits if you do not use them adequately. Thus, let us show you how to use ZATCA e-invoicing in our next subject.
How can you use ZATCA e-invoicing in KSA?
Issuing an electronic invoice in KSA is not as challenging as you could think. Above all, it involves knowing the best guidelines to use it adequately in your company. So, come and learn about them while you get your trade license in Saudi Arabia.
Primarily, you should know above all that you can issue an e-invoice in Saudi Arabia for all taxable goods and services. Ergo, you need to adopt an e-invoicing format in KSA if you have a VAT-registered business. It applies to every business, including one with virtual offices.
On the other hand, it is essential to understand that you must issue every electronic invoice in KSA in the Arabic language. Indeed, you can translate them into other languages, such as English or Spanish. But it will not be a valid ZATCA e-invoicing if it is not in Arabic.
Finally, remember that some transactions may require a printed copy of your electronic invoices. It is a providence that applies to B2B, B2G, and B2C transactions, where e-invoicing in Saudi Arabia is mandatory. You can find it in the regulations you will know in our next topic.
Which regulations exist regarding e-invoicing in Saudi Arabia?
Setting up an electronic invoicing system in your company is a two stages process. As you will see, they are like the recruiting and hiring stages of all PRO services. Therefore, you will find it helpful to know them in detail for your organization in KSA.
The first stage of e-invoicing in Saudi Arabia implies shifting your physical invoice-issuing procedure to an electronic format. Furthermore, you also must design an adequate method to store them digitally. Most importantly, you will need internet connectivity in compliance with ZATCA.
Once you complete this, you can begin phase two of the process. At this point, you will need to integrate with the ZATCA e-invoicing system. As a result, it will allow you to send every e-invoice in Saudi Arabia to their portal for verification and validation.
Nevertheless, even your immigration services expert will tell you that you need to know which electronic invoice types exist. Above all, only such types can guarantee that your integration is successful. So, let us show you what electronic invoices you can issue.
Types of electronic invoices in Saudi Arabia
Depending on which transaction you are performing, ZATCA will allow you to issue two types of e-invoicing in Saudi Arabia. Assuredly, they are less than the visa services you can hire. But they are both essential for your electronic invoicing system.
When you perform a B2B or B2G transaction, you will have to issue a tax e-invoice. In essence, it is a standard invoice with an electronic format. Most importantly, it inputs VAT deductions to your buyer. Therefore, it will allow you to keep your Saudi Arabia taxes up to date.
On the contrary, you can issue simplified electronic invoices if you perform a B2C transaction. Differently from the first type, a simplified e-invoice in Saudi Arabia allows your buyer to avoid needing to use it to input VAT deductions. Nevertheless, it must include a QR code for validation.
In summary, you can find more than one e-invoicing format in KSA. Nonetheless, all have the same objective: Become a digital invoice for your clients. Now, it is time to show you how the process of using it works.
How does the process of using e-invoicing in Saudi Arabia work?
First and foremost, it is worth mentioning that using the ZATCA e-invoicing system is no different from issuing regular invoices. However, you can perform this process more efficiently and safely by using electronic invoices. Thus, come and discover how such a process works.
After renewing your residence permit, you must ensure using e-invoicing software in Saudi Arabia that includes all the required fields. Then, you can use it to issue a copy to your buyer. In phase two, you must remember first to validate it at the ZATCA portal before sending it.
Last, you must store every electronic invoice you send to your clients. Indeed, it will not involve saving it in your wallet like your driving license. It is a task where you can use solutions such as a cloud. Undoubtedly, it would make your ZATCA e-invoicing storage easier.
As you witnessed, using e-invoicing in Saudi Arabia is not as challenging as you could imagine. But there are things you should and should not do when you use it as a taxpayer. Fortunately, our following subject will show you all you need to know about it.
What should you do and not do as a taxpayer using ZATCA e-invoicing in Saudi Arabia?
Unequivocally, you can solve several problems by using e-invoicing in Saudi Arabia. But it will generate more of them if you make wrong decisions. Therefore, let us show you the do’s and don’ts of using an e-invoicing format in KSA.
Nevertheless, employees of your payroll services team could give you an additional piece of advice regarding ZATCA e-invoicing. Thus, listen to them to learn more than we show you below:
Do’s
One of the first obstacles you find when setting up e-invoicing software in Saudi Arabia is seeking experts. Hence, you must search for assistance to configure your electronic invoicing system. Above all, you must ensure they comply with all the ZATCA requirements regarding e-invoicing in Saudi Arabia.
On the other hand, you should also train your staff on how to handle electronic invoicing. Consequently, your team will issue electronic invoices as valid as your Iqama status. After all, you do not want to have problems with your clients regarding their VAT deductions.
Finally, remember to hire an IT team with the required skills to keep your network running. Indeed, they will be responsible for allowing you to validate and store every e-invoice in Saudi Arabia.
Do not’s
The list of the things you should not do as a taxpayer using e-invoicing in Saudi Arabia is short. Nevertheless, you must avoid performing any of them at all costs. They could hurt your business on a financial level, or worse.
When you perform your branch opening, keep in mind that using electronic invoices disables the use of manual invoices. Also, avoid using an e-invoicing format in KSA with security issues, such as anonymous access or time changes.
Last, do not even think about deleting any stored e-invoice in Saudi Arabia. After all, you will need them for future reference or audit processes in your organization.
Where can you find more information about ZATCA e-invoicing in Saudi Arabia?
In KSA, receiving a written invoice is becoming a thing of the past. Today, more and more businesses set up systems of e-invoicing in Saudi Arabia every minute. Undoubtedly, it is a practice with several advantages you can get regardless of your industry.
However, learning to use e-invoicing software in Saudi Arabia can be challenging. Therefore, it is a process where seeking assistance looks like a good idea. But what if you want excellent help? Then, you have to reach out to us at Saudi Company Formation.
Begin to use e-invoicing in Saudi Arabia through our outstanding services. You also can contact us if there is something you do not understand about electronic invoices. Our experts are waiting for your call at +971 43 316 688 and your email at contact@saudicompanyformation.com.
You also can get a new job in a company that uses the ZATCA e-invoicing system through The Talent Point. Several excellent job offers are waiting for you at thetalentpoint.com. Do you want to know more? Contact our team at contact@thetalentpoint.com.
