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Integrated and automated e-invoicing is now a standard need for businesses in Saudi Arabia to meet the regulations of the Zakat, Tax and Customs Authority (ZATCA). In the framework of the digital transformation project, ZATCA defined standardized e-invoice mandatory fields that should be completed in every e-invoice to provide traceability, security, and compliance with tax legislation.
These fields are necessary for the companies that registered under VAT to conform to the e-invoicing rules and regulations in order to avoid penalty. The combined operation of these fields is a valuable advancement towards improving the economic activities of the kingdom of Saudi Arabia through the automation of many business processes, the minimization of human errors, and the optimization of tax collection and management.
Another goal of the ZATCA e-invoicing regulations is to promote the improved accuracy of invoice data and completeness of all the mandatory fields in every invoice. Such fields include UUID – Universally Unique Identifier, Cryptographic Stamp, and Previous Invoice Hash. All of these are mandatory fields which make the invoices genuine, easy to track, and auditable in case of a tax audit. By incorporating these fields, the businesses will be in a good book of the ZATCA guidelines to prevent any legal issues.
While Saudi Arabia continues to advance the adoption of e-invoicing in Riyadh and throughout the Kingdom, businesses must be aware of the required fields that need to be included into their invoicing processes. As a result of the implementation of the e-invoicing in Saudi Arabia by ZATCA, the companies are under pressure to integrate their ERP systems with the Fatoora portal. These field are not only legal requirements but also a way to improve the invoicing systems and make the work of businesses more efficient.
Under the new e-invoicing program by ZATCA, businesses are required to connect their ERP systems to the Fatoora portal. Every e-invoice consists of several fields of the transaction but there are key mandatory fields which must be filled in a legal way. These are the mandatory fields that would guarantee that every invoice is trackable, secure and in compliance with the Saudi tax authorities. Here are some of the most critical fields:
1. Universally Unique Identifier (UUID)
UUID is an international unique number that is generated for each e-invoice. It has a significant function in tracking invoices from creation to their disposal in the company. This is an auto populated field in compliant e-invoicing systems and it is a requirement that this field is included in the e-invoice XML. It is also important to mention that the UUID cannot be printed on invoices but should be included in the electronic record.
2. Cryptographic Stamp
Another of the required fields in e-invoices in Saudi Arabia is the Cryptographic Stamp. This digital stamp is actually placed behind the QR code and authenticates the e-invoice. It is created and stored automatically by the invoice solution and its purpose is to prevent the alteration of the invoice data. A compliant solution will generate the Cryptographic Stamp without the involvement of human beings.
3. Cryptographic Stamp Identifier (CSID)
The CSID is associated with the Cryptographic Stamp to aid in establishing its relation to the registered invoice solution. CSID is generated and controlled by the e-Invoicing Integration Portal and its usage is mandatory for all e-invoices to check the digital stamp’s authenticity.
4. Previous Invoice Hash
ZATCA requires that the Previous Invoice Hash must be repeated in the next invoice or document note. This hash functions as a digital fingerprint for the invoice and makes it very easy to track any modifications to previous invoices. It is created by compliant e-invoicing solutions to ensure that there is a flow and visibility in the transactions.
5. QR Code
The QR code is the obligatory field of the invoice and is placed both in the paper and electronic version. The latter includes basic information concerning the seller’s name, the number of his/her VAT registration, the date of issue of the invoice, the VAT amounts and the Cryptographic Stamp. The QR code means that the invoice data can be verified quickly, with the key information on the invoice easily retrievable.
6. Invoice Counter
The e-invoice has to comprise an invoice counter, a number created by the invoicing solution and being unique for each invoice. This makes it easier for the invoices to be issued in sequences and can be used by the business to keep track of their invoicing history. The counter should rise with every new invoice, which is issued.
7. Decimals in KSA e-Invoices
Another thing that cannot be overlooked is that decimals are very important when preparing the invoice because most of the time the price of the good or service sold is not rounded off to the nearest rival. According to the ZATCA’s e-invoice, there is a maximum number of decimal places that can be used in different fields. For instance, the total of the invoice, the VAT, and prices of the items to be sold must be rounded to a maximum of two decimal places for the sake of uniformity of the invoice.
When is this Mandatory Fields Required?
It is worth noticing that the mandatory fields mentioned above have to be adopted at various stages of e-invoicing. For instance, UUID, Cryptographic Stamp, and Previous Invoice Hash are fields that are necessary during the integration stage of e-invoicing while the QR code is necessary during the generation stage. These fields are essential knowledge for businesses to know when and how they should be put into practice to meet ZATCA’s requirements.
In this article, we will explore the e-invoice mandatory fields as ZATCA extends the e-invoicing system to Saudi Arabian businesses. The UUID, the Cryptographic Stamp, and the invoice counter are the fields that make the entire invoices safe, easily traceable, and in compliance with the Saudi tax laws. This means that businesses have to ensure that their ERP or POS systems are connected with the Fatoora portal to avoid late delivery or penalties.
By following the above said Mandatory Fields, businesses will not only remain compliant of e-invoicing in Saudi Arabia but also run smoother in their operations. To learn more about how your business can connect to the Fatoora portal, and to learn more about ZATCA’s E-invoicing in Riyadh rules, please refer to the official ZATCA website.
