All About ZATCA Defined Compliant e-Invoice Solution

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.