All About ZATCA Defined Compliant e-Invoice Solution

Updated on :  

08 min read.

All taxpayers must mandatorily comply with the KSA e-invoicing regulations and opt for a compliant e-invoicing solution for generating electronic invoices. Taxpayers need to ensure their compliant e-invoice solution integrates with the ZATCA portal. Also, taxpayers should adhere to the stated official regulations while generating and sharing invoices.

Types of compliant e-invoicing solution

  • e-Invoice Solutions (B2G and B2B) – All solutions that taxpayers can use to generate electronic invoices for Business-to-Government (B2G) and Business-to-Business (B2B) transactions.

  • Simplified e-Invoice Solutions (B2C) – Taxpayers can use all solutions to generate simplified electronic invoices for B2C transactions.

An ideal e-invoicing solution should combine the requirements and process for both types and meet the official compliance requirements. 

Examples of compliant e-invoice solutions

Let us look at various invoice generating tools categorised depending on their transaction type:

  • B2C Transactions
    • Online cash registers (OCRs) primarily cater to the B2C domain only. OCRs generate invoices using a cash register device integrated with ZATCA, where the device generates, stamps, and stores the e-invoices. 
    • Networked Electronic Cash Registers (Net ECRs) similarly operate using cash registers that connect with a cloud server. This cloud server is used to store all the issued simplified e-invoices to report them within 24 hours on the ZATCA portal.
  • B2B & B2C Transactions
    • Enterprise Resource Planning Software (ERP) generates or issues e-invoices as one of its functions. 
    • E-Commerce Solutions help in issuing e-invoices automatically on an e-commerce platform connected to a local or cloud server. 

Simplified e-invoices for these invoice generation tools are stamped automatically on the cloud or local server integrated with ZATCA. On the other hand, the ZATCA Integration Portal stamps e-invoices during the clearance process for standard invoices.

  • Virtual Cash Register (VCRs) generate e-invoices directly on an end-point software using any of the general-purpose devices like a smartphone, PC, etc.
  • Cloud Solutions – As the name suggests, it uses a cloud server to issue or generate, save and archive e-invoices.

What accounts for a non-compliant e-invoicing solution?

Many other invoice generating tools do not meet the issued e-invoice compliance regulations as stated officially. These are a few invoices developing tools that are not compliant with e-invoicing solutions:

  • Tools for text editing
  • MS Excel or similar spreadsheet software
  • Any bookkeeping software unless adapted to fit the compliance mandates
  • Unless they also come with the provision to save an electronic copy of the invoices as an archive, paper-based invoice printers.

Features of a compliant e-invoice solution

  • Internet connectivity – Compliant e-invoicing solution must connect to the internet and share the invoices with the Authority portal.
  • Integration with ZATCA portal – All e-invoicing solutions must connect with the Application Programme Interface (API) of the Authority e-Invoicing Integration portal.
  • Tamper-proof – It must have a tamper-proof mechanism to prevent any illicit activity, modification of invoices or tampering with the invoice or solution itself.
  • Record keeping features – Taxpayers must be able to keep records for all their transactional invoices. 
  • Security features – They must adhere to e-invoice compliance of detecting and recording any kind of manual tamper, modifications, or malicious activity. Also, it should:
    • Protect the e-invoices and electronic notes from any kind of manual or undetected deletion and any kind of alteration.
    • Enable taxpayers to save and archive the e-invoices in XML format at all times, even with unstable or no Internet connectivity.
    • Ensure there is no data leak or loss of information while taxpayers generate their e-invoices.
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