Recently on 24th June 2022, ZATCA has released the final Controls, Requirements, Technical Specifications and Procedural Rules for Implementing the Provisions of the e-invoicing Regulation Which will be implemented from 1 January 2023.
The Phase 2 regulations which were previously published on 28th may 2021 had conditions to be compiled under phase 1 & phase 2, independently, by resident businesses. Still, ZATCA had mentioned that the conditions listed under Phase 2 will be reviewed & regulations will be modified. Consequently, ZATCA released the amended & final regulations of the integration Phase on 24th June 2022.
Quick overview of Phase 2!
Phase 2 regulations will create an important base for taxpayers in the implementation of e-invoicing under phase 2 which is also called the integration Phase. The Integration Phase ( Phase 2) will be implemented in waves according to – All announcements on the ZATCA portal residential businesses with a taxable turnover of SAR3 Billion for the year 2021 will be part of the first wave and should follow the e-invoicing phase 2 requirements between the period of 1st January 2023 to 30th June 2023.
General outlook of key amendments to the updated e-invoicing legislation:
- Amendments to the requirement to mention certain data fields between mandatory, conditional, or optional.
- Amendments to the business rules for validation of the XML invoices.
- Revisions to the process with respect to authentication of the taxpayer’s EGS with ZATCA by adding a secret value component
- Inclusion of Fields for the Purchase Order and Contract Identification Numbers.
- Removal of categorization of a Value Added Tax Identification Number (VAT ID) into a Group VAT number and individual VAT number
With the release of the Phase 2 Regulations, the ZATCA will start notifying certain taxpayers who are mandated to go live with Phase 2 from 1 January 2023 (i.e., the first wave of the phase 2 e-invoicing regime). It is expected that taxpayers will start getting notifications in the coming weeks according to their go-lives dates & most importantly the turnover.