KSA E-Invoicing: Required Fields for a Simplified E-Invoice

The Kingdom of Saudi Arabia has now embraced a new way of invoicing through e-invoicing regulations that was initiated by the Zakat, Tax and Customs Authority (ZATCA). This change that has been embarked on to improve transparency of taxes and ease the tax processes has made it compulsory for all business to produce electronic invoices for each transaction. Of these invoices, the simplified e-invoice is for retail (B2C) and has different characteristics compared to normal B2B invoices. Simplified e-invoices are not as detailed as the traditional ones, but they should meet the laid down standards of ZATCA and be as original as possible.

The standard e-invoice is less complex in that it does not need the buyer’s details like the full address or identification number hence making it easier for the business to issue invoices for retail sales. However, even with such a design, these invoices cannot lack some important mandatory fields such as the seller’s details, the number of the invoice, and a cryptographic stamp. Due to the fact that the implementation of e-invoicing has been divided into two phases, businesses need to make sure that these invoices meet Phase 1 and Phase 2 requirements and expectations that come with the set time limits of the implementation.

With e-invoicing getting more and more important in KSA, it is necessary to know which fields are needed for a basic e-invoice. Regardless of where the invoices are being issued, whether in Riyadh or elsewhere in the Kingdom, it is beneficial for companies to be aware of the current rules and regulation to ensure that they can avoid possible fines and disruption to their trading. The move to e-invoicing is therefore a step towards the right direction in the modernization of Saudi Arabia’s tax systems to enhance efficiency and compliance by companies throughout the kingdom.

What is a Simplified E-Invoice in KSA?

A simplified e-invoice is an electronic invoice designed for retail businesses in Saudi Arabia. In contrast to the traditional e-invoices, which need the buyer identification data, a simplified e-invoice does not necessarily presuppose the inclusion of the buyer’s data, except for the buyer’s name. The main purpose of e-invoicing in Saudi Arabia is to automate the flow of documents, improve the tax regulation, and minimize tax fraud.

In order to meet the requirements of the KSA e-invoicing regulations, a simplified e-invoice must contain certain mandatory and optional fields, and must meet the conditions that have been laid down by ZATCA. Here are the main areas that must be contained in a basic e-invoice.

Types of Fields in a Simplified E-Invoice

There are three main types of fields that must be considered when generating a simplified e-invoice:

• Mandatory Fields: These fields have to be entered into the e-invoice and are mandatory according to ZATCA. Omission of any of the mandatory fields will be a breach of the laid down compliance.
• Conditional Fields: These fields are optional fields and they are filled only if some specific conditions are fulfilled. If not, they can be omitted.
• Optional Fields: These fields are not mandatory, however, the taxpayer is free to add them.

Fields in a Basic E-Invoice

Here’s a breakdown of the essential fields in a simplified e-invoice, as required by e-invoicing in Riyadh and across Saudi Arabia:

• Type of Invoice: This invoice should be described as a “simplified tax invoice” on it.
• Invoice Identifiers: This consists of distinct numbers such as the Invoice Reference Number (IRN) or the Universally Unique Invoice Identifier (UUID) to identify the invoices.
• Date: The date and time of generation of the invoice must be provided for.
• Seller Identification: Details like the name of the seller, his address and the VAT number has to be disclosed.
• Buyer Identification: Simplified e-invoices do not need many details of the buyer, but the buyer’s name must be provided.
• Line Items: This field covers all the gory details of the good or service offered including the description, unit price, quantity and subtotal.
• Totals: The invoice also has to show the total amount for which the goods were invoiced with VAT and any discount given.
• Payment Terms: This section identifies the payment type that is cash, credit card or bank transfer.
• Notes: Any further information that is not recorded in other fields can be made here.
• Cryptographic Stamp: The e-invoice is secured and validated by the use of a cryptographic stamp.

Required Fields during the E-Invoicing Implementation in the First Phase in KSA

The regulations for e-invoicing in KSA were divided into three phases, and the first phase began on 4th Dec 2021 and includes mandatory fields for simplified e-invoices. These include:

• Invoice Type Description
• Invoice Reference Number
• QR Code
• Invoice Issue Date and Time
• Seller Name and Address
• Goods/Service Description
• Unit Price
• Quantity
• Subtotals (exclusive of VAT)

All the fields described in these fields have to be included for all the simplified e-invoices created during the Phase 1.

Conditional Fields for Improved E-Invoices

As per Phase 1, some of the fields are conditional mandatory fields. These fields must be included only if certain conditions are met, such as:

• Special billing arrangements with a third party
• Flags of special transactions type
• VAT Registration Number
• Group VAT Registration Number
• VAT Total
• Invoice Gross Total including VAT

Conclusion

The use of e-invoicing in Saudi Arabia has been a revolution in the way that organizations conduct their transactions. Awareness of the basic fields needed for a simple e-invoice complies with the regulation by ZATCA and simplifies the process of invoicing for retail transactions. Regardless of the region you are in, Riyadh or other parts of Saudi Arabia, compliance with mandatory, conditional, and optional fields will keep your business in line with KSA e-invoicing rules.