Zakat and Tax Authority Sets Criteria for Targeting Entities in Group 21 during “Integration and Linkage” Phase
The Zakat, Tax, and Customs Authority have established criteria for selecting targeted entities in Group 21 for the implementation of the “integration and linkage” phase of electronic invoicing. This group includes all entities with revenues subject to Value Added Tax exceeding SAR 1.25 million within 2022, 2023, or 2024. The Authority will notify all targeted entities in Group 21 to connect their electronic invoicing systems with the “Fatora” system before November 30, 2025, as part of the second phase, which involves additional requirements compared to the first phase. These requirements include linking taxpayers’ electronic invoicing systems with the Fatora system, issuing electronic invoices based on a specific format, and including additional elements in the invoice.
The transition to the second phase, “integration and linkage,” will be gradual, with the remaining groups being informed directly by the Authority at least six months before the specified deadline. The Authority emphasized that this second phase is in line with the Kingdom’s economic transformation and digital advancement, building upon the success of the initial implementation of electronic invoicing. The first phase, which commenced on December 4, 2021, yielded positive results such as enhancing consumer protection nationwide. The Authority commended taxpayers for their significant awareness and swift compliance during the first phase of the project.
It is worth noting that the first phase, “issue and storage,” of the electronic invoicing project began on December 4, 2021. Taxpayers subject to the electronic invoicing regulations are required to completely cease using handwritten or computer-generated invoices through text editing or spreadsheet software, ensuring they have a technical solution for electronic invoicing that aligns with the Authority’s requirements. Additionally, they must ensure that electronic invoices are issued and stored with all the necessary elements, including Quick Response (QR) codes, and other specified requirements.
