Self-billing and third-party billing are two types of invoicing methods prevalent in the Kingdom of Saudi Arabia (KSA). This article explains the impact of e-invoicing on third-party billing.
It is an invoicing mechanism where a third party issues invoices on behalf of the registered VAT seller. This third party can be any accounting or other professional firm that fulfils certain criteria specified under VAT legislation.
The third-party billing mechanism remains intact under the new e-invoicing regime. However, the e-invoices by the third party need to contain an electronic marker, indicating the invoice is issued by a registered third party. However, this electronic marker will not be visible on the human-readable version of the e-invoice.
A VAT-registered seller, who has outsourced its billing process to a third party, must keep the following points in mind:
It is the responsibility of the VAT-registered seller to ensure that the details issued in the e-invoice are valid. Also, the liability to deliver goods and services to buyers and deposit VAT collected to the authorities is the sole responsibility of the VAT-registered seller. Apart from issuing e-invoices on behalf of the seller, the third party will not have any involvement in the underlying supply of goods and services. If any fake or incorrect details are provided in the invoices, the seller shall be solely responsible for the same.
Al Raseem Co. Ltd., a leading online bookselling company in the Kingdom of Saudi Arabia, has outsourced its invoicing process to a CPA firm- Al Nakheem. For all the online sales, invoices are issued by Al Nakheem to buyers on behalf of Al Raseem. All such e-invoices should appropriately reflect the TIN of Al Raseem and contain a statement saying that invoices are issued on behalf of Al Raseem Co. Ltd. The e-invoice, generated through an identified generation utility, will contain an electronic marker, which will not be visible to human eyes.
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