Saudi Arabia’s E-invoicing Phase - 2 Clearance & Reporting Process Explained

A Guide to Saudi Arabia’s B2B and B2C E-Invoicing Process implementation

Ajith Kumar M
April 17, 2023
3 min

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As the Kingdom of Saudi Arabia (KSA) continues to digitize its tax system, the importance of phase-2 e-invoicing compliance cannot be overstated. In this blog, we will delve into the clearance and reporting process for phase-2 e-invoicing integration in Saudi Arabia.

Understanding the importance of phase-2 E-invoicing compliance

As per KSA's General Authority of Zakat and Tax (GAZT), phase-2 e-invoicing compliance is mandatory for all businesses with annual revenue exceeding SAR 1 million. Failing to comply with the regulations can lead to penalties and legal consequences. Therefore, businesses must understand the importance of phase-2 e-invoicing compliance and ensure their systems are compliant.

The onboarding process for phase-2 E-invoicing integration

Before diving into the clearance and reporting process, it is essential to have a basic understanding of the onboarding process for phase-2 e-invoicing integration. The previous blog by Complyance.io provides detailed information about the onboarding process, which includes registering for e-invoicing, obtaining GAZT approval, and integrating with the Fatoora portal.

The clearance process for B2B transactions

Businesses engaged in B2B transactions need to ensure that they share the invoice only after clearance from the Fatoora portal with their customers. This process involves sharing the invoice's XML data with the Fatoora portal using the clearance API. ZATCA will perform mandatory validation field checks on the XML data and put the cryptographic stamp on the data if it clears the validation process. Once cleared, the invoice can be shared with the customer in a PDF or printed paper format.

The reporting process for B2C transactions

For businesses engaged in B2C transactions, it is mandatory to report all the invoices generated throughout the day to the Fatoora portal using the reporting API. This process involves sharing the invoices' XML data with the Fatoora portal's reporting API. ZATCA will perform a validation check on the invoice data, and if it passes the check, the Fatoora portal will have a copy of the invoice report stored in its database.

Integrating Complyance.io E-invoicing clearance engine with your existing system

Complyance.io offers an E-invoicing clearance engine that can be integrated with your existing E-invoicing solution or any third-party software. They can get the data from your database and transform it to make it compliant with ZATCA's phase-2 E-invoicing regulations. This engine can help you clear or report invoices as per the clearance and reporting process mentioned above.

Partnering with Complyance.io for phase-2 e-invoicing compliance

Complyance.io can help ERP solution providers or any other third-party software solution providers doing business in Saudi Arabia become compliant with phase-2 e-invoicing regulations. They offer services such as onboarding, integration, and training to ensure that your system is compliant with the regulations. Reach out to them for more information about partnering with them for phase-2 e-invoicing compliance.

Wrap-Up:

In conclusion, phase-2 e-invoicing integration is an important step toward digital transformation in Saudi Arabia. The clearance and reporting process plays a crucial role in ensuring compliance with ZATCA's regulations. Antna Technologies, now known as Complyance.io, offers an E-Invoicing Clearance Engine Integration that can be integrated with existing e-invoicing solutions or third-party software to make data compliant with ZATCA's regulations. By partnering with Complyance.io, ERP solution providers and third-party software providers can help their customers get compliant with phase 2 e-invoicing regulations easily. Taxpayers need to comply with ZATCA's regulations to avoid penalties and ensure smooth business operations.