Intelligent Fin.tech Issue 24 | Page 14

E-invoicing in the Kingdom of Saudi Arabia

Historically , the automation of business processes and tax reporting has evolved somewhat independently , or in worst case , have remained isolated in their processes and data silos . The overlap between these functions is steadily increasing with the tax authorities demanding more transparency and real-time access to information . Introduction of e-invoicing across the globe in last few years is one such move towards enhanced business processes and tax reporting .

e-Invoicing in KSA – what has changed and what is changing with e-invoicing ?

Electronic invoicing is a process aimed to transform the traditional practice of issuing the paper invoices to digitalise the process for the exchange of invoices in a structured electronic format between buyer and seller through a unified process . E-invoicing also provides realtime invoicing data to the government and helps in plugging revenue leakages .

Applicability of the mandate to generate e-invoices

The e-invoicing regulations mandate all natural or legal persons who carry on an economic activity and are registered for VAT in KSA or are required to be registered for VAT in the KSA to generate e-invoices and comply with the e-invoicing provisions .

Thus , the following categories of taxpayers would be covered within the scope of e-invoicing :

• A taxable person / business who is a resident in the Kingdom

• The customer or any third party who issues a tax invoice on behalf

of the taxable person that is a resident in KSA according to the VAT Implementing Regulation .

The taxpayers who are not resident of the KSA for the purpose of VAT laws are not required to issue electronic invoices for supplies or amounts received , which are subject to tax in KSA . �

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