KSA announced the businesses affected by the second wave of the integration phase

December 23, 2022

According to ZATCA’s announcement, the integration phase‘s second wave will affect taxpayers whose VATable revenue for 2021 exceeded half a billion SAR (approximately 133 million USD).

Timeline

The mandatory use of e-invoicing in Saudi Arabi is to be rolled out in two phases. Phase 1 is the generation phase. Phase 2 is the integration phase.

Phase 2 integration has been split into two waves:

  • The first wave starts from January 1, 2023, and affects taxpayers whose VATable revenue for 2021 exceeded 3 billion SAR.
  • The second wave starts from July 1, 2023, and affects taxpayers whose VATable revenue for 2021 exceeded half a billion SAR.

ZATCA will notify affected taxpayers of their Phase 2 wave at least six months in advance.

Impact

ZATCA will notify taxpayers in scope by July 1, 2023 at the latest, and upon this notification, each taxpayer will have 6 months to comply with the integration phase requirements. Compliance timelines will, therefore, vary for each taxpayer depending on the receipt of the notification.

The practical implication for businesses is that they will be expected to comply at some point between July 1, 2023 and December 31, 2023 depending on when they receive the notification.

In the Integration Phase, taxpayers must integrate their systems with ZATCA. Taxpayers will then be obliged to:

  1. obtain a clearance for Tax Invoices (including their respective debit and credit notes), and
  2. report the transactions within 24-hours for issued Simplified Tax Invoices (including their respective debit and credit notes).

Companies must be ready to integrate their systems once the second wave becomes effective.

The above is a summary. For more information on the second phase requirements, check out our previous blog explaining requirements in more detail.

How can Fonoa help?

At Fonoa we are experts in the field of E-Invoicing and Digital Reporting.  We can help you make sense of the evolving reporting landscape in Saudi Arabia and across the world. One of our clients went live with Phase One e-invoicing in just 72 hours. Get in touch with an expert, and see how we can simplify reporting for your business.

Eszter Kovacs
Tax Researcher

Eszter is a Budapest-based Tax Researcher at Fonoa. Previous to her time at Fonoa, she worked as an Associate at the tax law practice group of Baker McKenzie Hungary. Eszter joined Fonoa because she recognizes that the world of taxation is moving towards digitalization, and sees this company as a clear industry leader in that regard.