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All About ZATCA Defined Compliant e-Invoice Solution
Updated on: Nov 21st, 2022
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4 min read
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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 solutions
- 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:
| Invoice generation tool | Description | Type of invoices that can be generated by the respective tool |
| Enterprise Resource Planning Software (ERP) | This tool provides invoice generation as one of its functions. | B2B & B2C |
| e-Commerce Solutions | This tool helps in issuing e-invoices automatically on an e-commerce platform connected to a local or cloud server. | B2B & B2C |
| Online cash registers (OCRs) | OCRs generate invoices using a cash register device integrated with ZATCA, where the device generates, stamps, and stores the e-invoices. | B2C |
| Networked Electronic Cash Registers (Net ECRs) | This tool operates 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. | B2C |
| Virtual Cash Register (VCRs) | VCRs generate e-invoices directly on an end-point software using devices like a smartphone, PC, etc. | B2B & B2C |
| Cloud Solutions | As the name suggests, it uses a cloud server used to issue or generate, save and archive e-invoices. | B2B & B2C |
Simplified e-invoices generated on the ERPs, e-Commerce solutions, OCRs and Net ECRs will be stamped automatically on the cloud or local server integrated with ZATCA. On the other hand, the ZATCA Integration Portal stamps standard e-invoices during the clearance process.
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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