The Zakat, Tax and Customs Authority (ZTA) reiterated the importance of dealing with the new tax system through 3 steps: using a billing system that is compatible with the Authority's requirements, issuing and saving electronic invoices and not issuing invoices written by hand or with text editing and photocopying programs.

Reiterating the importance of dealing with the new tax system through 3 steps.

Phase I requirements

The Authority noted that December 4 is the date for all taxpayers to apply electronic invoicing for their new tax invoices, and no written or scanned invoice will be accepted, and stated that the most important changes to the tax invoice are adding a QR code optionally, adding the buyer's VAT registration number if he is registered for VAT, in addition to adding the invoice address.

The second phase begins in early January 2023, and the invoice contains the minimum information in addition to the requirements of the first phase is the encryption function (HASH) of the invoice or electronic notice, the encryption seal and the public key used to seal the encryption (Pablic Key).

The most important changes to the tax invoice are the addition of a QR code optionally, the addition of the buyer's VAT registration number if registered for VAT, and the addition of the address of the invoice.

Tamper Warnings

The Zakat, Tax and Customs Authority warned against tampering with electronic invoicing, using more than one sequence per unit, extracting or moving the encryption key and changing the time, stressing that strict penalties await manipulators, indicating that the minimum information that must appear to the consumer when scanning the QR code is the name of the supplier, the supplier's added tax registration number, the timestamp of the invoice or notices, the date and time and the total value with added value.

Minimum information that must be shown to the consumer when scanning the QR code is the name of the supplier, the added tax registration number of the supplier, the timestamp of the invoice or notices, the date, the time and the total value with added value. <For his part, Mohammed Al-Muhanna, an advisor at the Authority, explained that it is not mandatory for the accounting program to be cloud-based to apply the tax, pointing out that simplified tax invoices and associated notices that are mostly issued from an establishment to an individual must include the QR code and the invoice address, while invoices issued by one establishment to another must register the name of the buyer with VAT if he is a taxpayer.

Protecting consumers by promoting competition

<Muhanna listed the benefits of electronic invoicing, the most important of which are: Enhancing the atmosphere of fair competition, protecting consumers by providing a unified mechanism for documenting and auditing invoices, fighting the hidden economy, reducing commercial concealment, enriching the consumer experience and digitizing the relationship with the supplier, in addition to increasing the rate of compliance with tax obligations by enhancing the verification of commercial transactions.

Al-Muhanna pointed out that there are no approved providers yet in electronic invoicing and the taxpayer must use any system that is compatible with the Authority's regulations, and the Authority has also not adopted a specific filing format in the first phase and can use any format, pointing out that the commitment to electronic invoicing includes all taxpayers subject to tax in the Kingdom and any party that issues a tax invoice on behalf of the taxpayer and excludes non-resident taxpayers in the Kingdom.

All taxpayers are subject to electronic invoicing.