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03 December 2024

Saudi Arabia announces 18th wave of Phase 2 e-invoicing integration

  • Saudi Arabia's Zakat, Tax and Customs Authority has announced the criteria for taxpayers to be included in the 18th wave of Phase 2 e-invoicing integration.
  • Taxpayers resident in Saudi Arabia, with a taxable turnover exceeding SAR2m during the calendar year 2022 or 2023, should comply with the Phase 2 e-invoicing requirements that are effective from 1 June 2025.
 

Executive summary

On 29 November 2024, Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) announced on its website that taxpayers resident in Saudi Arabia, with a taxable turnover exceeding two million Saudi Riyal (SAR2m) during calendar year 2022 or 2023, will fall within the 18th wave of Phase 2 e-invoicing integration and should comply with the Phase 2 requirements. The ZATCA will notify the impacted taxpayers in preparation for linking and integrating their electronic invoicing systems with the ZATCA's e-invoicing platform (Fatoora).

Further, the ZATCA Governor issued Decision No. (1446-99-671) dated 18/05/1446AH, which was published in the Official Gazette on 29 November 2024 and mentions that taxpayers coming under the 18th wave should comply with the Phase 2 e-invoicing requirements between 1 June 2025 and 31 August 2025, inclusive of both dates.

Detailed discussion

Background

On 4 December 2020, the ZATCA introduced e-invoicing in Saudi Arabia, releasing the E-Invoicing Regulations. E-invoicing in Saudi Arabia is being implemented in two phases:

  • Phase 1, effective from 4 December 2021, mandates generation of e-invoices and e-notes, including related processing and recordkeeping.
  • Phase 2, effective from 1 January 2023, mandates integration of a taxpayer's system with the ZATCA, along with the transmission of e-invoices and e-notes to the ZATCA. This phase is being implemented in waves. The criteria and timelines for the first 17 waves, which were previously announced, are:

Wave

Criteria

Timeline

11

Turnover of more than SAR3b during calendar year 2021

1 January 2023 to 30 June 2023

22

Turnover of more than SAR500m up to SAR3b during calendar year 2021

1 July 2023 to 31 December 2023

33

Turnover of more than SAR250m during calendar year 2021 or 2022

1 October 2023 to 31 January 2024

44

Turnover of more than SAR150m during calendar year 2021 or 2022

1 November 2023 to 29 February 2024

55

Turnover of more than SAR100m during calendar year 2021 or 2022

1 December 2023 to 31 March 2024

66

Turnover of more than SAR70m during calendar year 2021 or 2022

1 January 2024 to 30 April 2024

77

Turnover of more than SAR50m during calendar year 2021 or 2022

1 February 2024 to 31 May 2024

88

Turnover of more than SAR40m during calendar year 2021 or 2022

1 March 2024 to 30 June 2024

99

Turnover of more than SAR30m during calendar year 2021 or 2022

1 June 2024 to 30 September 2024

1010

Turnover of more than SAR25m during calendar year 2022 or 2023

1 October 2024 to 31 December 2024

1111

Turnover of more than SAR15m during calendar year 2022 or 2023

1 November 2024 to 31 January 2025

1212

Turnover of more than SAR10m during calendar year 2022 or 2023

1 December 2024 to 28 February 2025

1313

Turnover of more than SAR7m during calendar year 2022 or 2023

1 January 2025 to 31 March 2025

1414

Turnover of more than SAR5m during calendar year 2022 or 2023

1 February 2025 to 30 April 2025

1515

Turnover of more than SAR4m during calendar year 2022 or 2023

1 March 2025 to 31 May 2025

1616

Turnover of more than SAR3m during calendar year 2022 or 2023

1 April 2025 to 30 June 2025

1717

Turnover of more than SAR2.5m during calendar year 2022 or 2023

1 May 2025 to 31 July 2025

The ZATCA has already notified resident businesses falling under the above waves to comply with Phase 2 of e-invoicing as per their applicable timelines.

ZATCA announcement

Based on the latest announcements, the ZATCA will begin notifying taxpayers who fall within the 18th wave of Phase 2 e-invoicing integration, to go live within the period between 1 June 2025 and 31 August 2025, inclusive of both dates.

Implications

Resident businesses should comply with the obligations of Phase 2 e-invoicing integration based on the ZATCA notification and undertake the relevant steps in making the required changes in their information technology systems. Taxpayers should comply with the Phase 2 requirements in line with the e-invoicing regulation to preclude possible penalties.

Taxpayers who do not fall within the first 18 waves of Phase 2 e-invoicing integration should monitor future announcements from the ZATCA on the integration timeline period applicable to them in subsequent waves.

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Endnotes

1 See EY Global Tax Alert, Saudi Arabia releases final e-invoicing regulations for Phase 2, dated 24 June 2022.

2 See EY Global Tax Alert, Saudi Arabia announces second wave of Phase 2 e-invoicing integration, dated 28 December 2022.

3 See EY Global Tax Alert, Saudi Arabia announces third wave of Phase 2 e-invoicing integration, dated 24 March 2023.

4 See EY Global Tax Alert, Saudi Arabia announces fourth wave of Phase 2 e-invoicing integration, dated 2 May 2023.

5 See EY Global Tax Alert, Saudi Arabia announces fifth wave of Phase 2 e-invoicing integration, dated 30 May 2023.

6 See EY Global Tax Alert, Saudi Arabia announces sixth wave of Phase 2 e-invoicing integration, dated 16 June 2023.

7 See EY Global Tax Alert, Saudi Arabia announces seventh wave of Phase 2 e-invoicing integration, dated 31 July 2023.

8 See EY Global Tax Alert, Saudi Arabia announces eighth wave of Phase 2 e-invoicing integration, dated 24 August 2023.

9 See EY Global Tax Alert, Saudi Arabia announces ninth wave of Phase 2 e-invoicing integration, dated 21 November 2023.

10 See EY Global Tax Alert, Saudi Arabia announces 10th wave of Phase 2 e-invoicing integration, dated 4 April 2024.

11 See EY Global Tax Alert, Saudi Arabia announces 11th wave of Phase 2 e-invoicing integration, dated 29 April 2024.

12 See EY Global Tax Alert, Saudi Arabia announces 12th wave of Phase 2 e-invoicing integration, dated 28 May 2024.

13 See EY Global Tax Alert, Saudi Arabia announces 13th wave of Phase 2 e-invoicing integration, dated 8 July 2024.

14 See EY Global Tax Alert, Saudi Arabia announces 14th wave of Phase 2 e-invoicing integration, dated 5 August 2024.

15 See EY Global Tax Alert, Saudi Arabia announces 15th wave of Phase 2 e-invoicing integration, dated 3 September 2024.

16 See EY Global Tax Alert, Saudi Arabia announces 16th wave of Phase 2 e-invoicing integration, dated 30 September 2024.

17 See EY Global Tax Alert, Saudi Arabia announces 17th wave of Phase 2 e-invoicing integration, dated 4 November 2024.

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Contact Information

For additional information concerning this Alert, please contact:

EY Consulting LLC, Dubai

Ernst & Young Professional Services (Professional LLC), Riyadh

Ernst & Young Professional Services (Professional LLC), Jeddah

Ernst & Young Professional Services (Professional LLC), Al Khobar

Ernst & Young LLP (United States), Middle East Tax Desk, New York

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

Document ID: 2024-2186

 
 

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