Electronic Invoice Program Approved in Saudi Arabia

Many companies and institutions need to adopt a cloud accounting system with modern techniques that allows them to manage all their transactions and financial documents accurately by organizing organized data records with serial numbers for each electronic invoice so that the company’s accountants can go back, study, and review them from any time and anywhere.

The Zakat, Tax, and Customs Authority has sought to find a comprehensive guide to enable stakeholders to establish cloud accounting programs that are consistent with their requirements. It also enables companies to convert and issue invoices and paper notices into electronic documents that govern the dealings between the seller and the buyer with integrated electronic coordination.

In the article below, we provide you with a comprehensive guide that explains to you the details and conditions that make the electronic invoice program approved in the Kingdom of Saudi Arabia strong and what makes the Qoyod program a distinctive program and the first choice for most companies and official and private institutions to provide digital solutions to them in order to improve and manage their financial business.

Conditions for approving the e-invoice program in Saudi Arabia

The Zakat, Tax, and Customs Authority has set many conditions and foundations that make electronic accounting programs that include its approved electronic invoicing system applicable and usable in various sectors, and the following are clarified:

1. Availability of electronic invoice items

The electronic invoice program approved in the Kingdom of Saudi Arabia should include a set of important elements, which are explained in detail below:

• Process type, which is the box that specifies a user-defined definition of user UBL customization.
• Invoice number, which is a unique identification of an invoice.
• Unique invoice identifier, a globally unique reference that identifies the invoice.
• The date of issuance of the invoice (Gregorian calendar), which is the date of issuance of the invoice in accordance with Article 53 of the VAT Executive Regulations.
• The time of issuance of the invoice.
• Invoice type code, which is a code that identifies the functional type of invoice.
• Invoice type transactions, which is the invoice type subcode, and invoice transactions.
• Invoice note, which is a text note that provides information relevant to the invoice as a whole.
• The invoice currency symbol is the currency in which all invoice amounts are submitted, except for the total amount of VAT in the accounting currency.
• The tax currency symbol, which is the currency used for accounting and VAT reporting purposes as accepted or required in the seller’s country, must be used with the total amount of VAT in accounting currency (BT-111).
• The ID of the purchase order issued by the buyer.
• The invoice reference ID, which is the serial number (invoice number BT-1) of the original invoice to which the credit or debit note is associated,.
• Contract ID.
• The value of the invoice meter.
• Previous invoice spilt “SHA256 hash encoded with basis 64 for the previous invoice, which is calculated from the business payload of the previous invoice: UBL XML for the previous invoice without tags for QR code (KSA-14) and encryption stamp (KSA-15).
• QR, which includes the seller’s value-added tax (VAT) number, seller’s name, total value-added tax (VAT), total invoice (including value-added tax), division of the XML invoice, date and time of issuance of the invoice, and knowledge: trade record number with “CRN,” MOMRAH license with “MOM,” MHRSD license with “MLS,” number with “700, MISA license with “SAG,” and other OD with “OTH.”

Note 1: For simplified tax invoices and associated notes, they are applied by

Seller’s device, as for the tax invoice and the notes associated with it by ZATCA.

Note 2: If multiple IDs exist, you must enter one of the previously mentioned IDs.

Following the sequence specified above.

• The seller’s address, an additional address line, building number, city of residence, zip code, state or province, and country code.
• VAT number (registered).
• The other buyer ID that is only required if the buyer is not registered for VAT is one of the following:

-Tax ID number: “TIN.”

-business registration number with CRN.

– Momrah license with “MOM.”

– MHRSD license with MLS.

– 700 numbers with 700.

– MISA license with SAG.

– National ID card with NAT.

– Gulf Cooperation Council (GCC) knowledge.

– IQA residence number.

– Passport ID with PAS.

– Another ID with OTH.

If multiple identifiers exist, you must enter one of the previously mentioned identifiers, following the sequence specified above.

• The address of the buyer and the full details associated with it as the seller.
• Date of supply (Gregorian calendar).
• End date of supply.
• Payment method code, so that the entries are from the UNTDID code list 4461.
• Reasons for issuing a credit or debit note in accordance with Article 40 (paragraph 1) and Article 54 (3) of the Value Added Tax Regulations in the Kingdom of Saudi Arabia, which are issued for the following five cases:

– In the case that supplies are cancelled or suspended after they have occurred in whole or in part.

– In the case of a substantial change or modification in the supply leading to a change in the outstanding value-added tax (VAT).

– If the pre-agreed value of supply is adjusted between the supplier and the consumer,.

– In the case of the recovery of goods or services.

– In the case of a change in the information of the seller or buyer.

• Payment Terms.
• The IBAN payment account ID to be transferred to.
• Document level allowance indicator: the value of this tag indicating the deduction (allowance) should be “”False”.”
• The percentage of the document-level allowance with the base amount of the document-level allowance.
• Policy-level allowance amount without VAT.
• Currency is a document-level allowance amount.
• The base amount of the document-level allowance in conjunction with the percentage of the document-level allowance.
• The currency of the base amount of the document-level allowance.
• VAT category code for document level allowance.
• VAT rate for document level allowance.
• Each document-level allowance must have a reason for being allowed at the document level.
• Allow reason codes at the document level.
• The identifier of the tax system, which is a mandatory element,.
• Document-level shipping indicator, which indicates “correct” charges.
• The percentage of fees at the document level with the base amount of the fee.
• Document-level fee amount, excluding VAT.
• The currency of the amount of fees at the document level.
• The base amount of fees is at the level of the document, with the percentage of fees at the document level.
• The currency of the base amount of the fee at the document level.
• VAT category code for document-level charges.
• VAT rate for charges at the document level.
• The reason for the charges is at the document level.
• The total expense at the document level is included in the net amount of the invoice line and summarized in the net amount of the invoice line sum.
• The currency used for the amount of charges at the document level is not VAT.
• Total invoice amount excluding VAT.
• The currency of the total amount of the invoice without VAT.
• The amount paid in advance includes VAT, as this amount is subtracted from the total invoice amount with VAT to calculate the amount payable.
• The currency of the prepaid amount.
• Round the amount that must be added to the total to round the payment amount.
• Currency rounding the amount.
• The amount payable, which is the total invoice amount with VAT minus the prepaid amount paid in advance plus the rounding amount, is zero in the case of the invoice paid in full.
• The currency of the amount payable is due.
• The taxable amount of the VAT category, which includes the sum of all taxable amounts subject to the selected VAT category code and the VAT category rate, if the VAT category rate is applicable,.
• The sum of the net amount of the invoice line minus document-level allowances that are subject to the specific VAT category code and the VAT category rate if applicable.
• The currency of the taxable amount in the VAT category.
• The VAT category tax amount is calculated by multiplying the taxable amount of the VAT category with the VAT category rate of the relevant VAT category.
• The currency used for the category tax amount.
• VAT class code.
• The VAT category rate, which is a percentage that applies to the relevant VAT category,.
• The VAT exemption reason code, which is a coded statement of why the amount is exempt from VAT,.
• The text of the reason for exemption from VAT, which is a text statement of the reason for the exemption of the amount from VAT or the reason for not collecting it,.
• Tax system identifier.
• The ID of the invoice line, as this value must be only a numeric value between 1 and 999,999.
• Prepayment ID, which is the serial number (invoice number BT-1) of the associated prepayment invoice(s).
• UUID for prepayment, which is a unique reference that identifies the invoice (KSA-1) for the associated prepayment invoice(s).
• The down payment issue date, which is the BT-2 issue date for the associated prepayment invoice(s),.
• The time of issuance of the prepayment, which is the time of issue (KSA-25) of the associated prepayment invoice(s),.
• Prepaid document type code, which is the invoice type code (BT-3) for the associated prepayment invoice(s). The only acceptable value is “386.”.
• Billed quantity The quantity of items (goods or services) that were uploaded on the invoice line.
• The unit of measurement of the billed quantity.
• Net invoice line amount, which includes the total amount of the invoice line, including allowances (discounts), is the net price of the item multiplied by quantity.
• Net amount without VAT.
• Currency for the net invoice line amount.
• Invoice line allowance indicator.
• The percentage of the invoice line allowance.
• Reason for the invoice line allowance.
• Invoice line switch reason code.
• The currency used for the allowance line amount.
• The base amount of the invoice line allowance.
• The currency of the principal amount of the invoice line allowance.
• Invoice line charging indicator.
• The percentage of invoice line charges.
• The amount of invoice line charges without VAT.
• The currency of the invoice line fee amount.
• The base amount of the invoice line fee.
• The currency of the base amount of the invoice line fee.
• The reason for charging the invoice line.
• The amount of the VAT line is in accordance with Article 53.
• The currency of the VAT line amount.
• The line amount includes VAT.
• Currency line amount, incl. VAT.
• The taxable amount of the prepaid VAT category, which is the total taxable amount of the VAT category (BT-116) subject to the VAT category code specified for the associated prepayment invoice(s),.
• The currency of the VAT category for prepayment.
• The prepaid VAT category tax amount, which is the total amount of the VAT category tax amount (BT-117) subject to the VAT category code specified for the associated prepayment invoice(s),.
• The currency of the VAT category for prepayment.
• The name of the item is in accordance with Article 53 of the VAT Executive Regulations.
• ID of the buyer of the item.
• Vendor ID of the item.
• Standard Item ID, as this must include the product code type and the actual code, as this list includes the universal product code (11 digits, 12 digits, EAN 13 digits), GTIN (14 digits), the Harmonized System code for customs, and multiple other codes.
• The net price of the item is exclusive of VAT, after subtracting the item price discount.
• Currency for the net price of the commodity.
• The VAT category code for the item.
• The rate of VAT on the invoiced item as a percentage in accordance with Article 53 of the VAT Executive Regulations.
• VAT class code for prepayment.
• VAT rate for prepayment.
• The base quantity of the item price, including the number of units of the items to which the price applies.
• The unit code is the base quantity of the commodity price.
• Allowance indicator that describes a discount or charge.
• Discount the price of the item.
• Currency discounts the price of the commodity.
• The total price of the item is excluding VAT before subtracting the item price discount.
• The currency of the total price of the item.

2: Record storage and management

It is preferable that the electronic invoice software adopted in the Kingdom of Saudi Arabia be able to store and manage financial records in a manner that complies with local laws and regulations for a specified period of time.

Financial records include asset and liability records, ledgers, cash transactions, and any supporting documents such as checks and invoices.

3. Ability to integrate with accounting systems 

The e-invoice program approved in the Kingdom of Saudi Arabia is a program capable of compatibility and working with the various accounting systems of the websites where companies and institutions display their products, so that invoices can be automatically saved on the system.

It is also preferable that the electronic invoice software be integrated with other software and tax systems, such as human resource management software and customer relationship management, through the availability of application programming interfaces (APIs).

4: Providing digital security means

The electronic invoice program approved in the Kingdom of Saudi Arabia must be digitally secure, as it includes a database that works with a strong programming system and is able to encrypt information in order to ensure the integrity and confidentiality of the financial data of companies or institutions.

5: Providing digital security means

The electronic invoice program approved in the Kingdom of Saudi Arabia must be digitally secure, as it includes a database that works with a strong programming system and is able to encrypt information in order to ensure the integrity and confidentiality of the financial data of companies or institutions.

Why is Qoyod, the e-invoice program, approved in Saudi Arabia?

Qoyod Cloud Accounting Program is considered the approved electronic invoice program in the Kingdom of Saudi Arabia because it is a comprehensive system that works as an electronic invoicing program that conforms to all the requirements of the Zakat, Tax, and Customs Authority, for the following reasons:

• The possibility of creating electronic invoices approved by the authority, including all the elements required of them, is mentioned above.
• The ability to keep data records for a limited period enables companies or organizations to reconsider them at any time.
• Integration and work of the cloud accounting program with all other accounting and tax systems.
• High digital security, meaning companies and institutions can use it, enter all their financial data, and issue their own payment invoices without fear of breaches.

In conclusion…

You should be careful when choosing the new electronic invoice program for your company or organization, as the accounting program must be secure and work within the conditions of data and information security in the Kingdom of Saudi Arabia, and it must include advanced technologies that detect any attempt to hack and manipulate data. It is also important that the system be constantly updated and have the ability to connect to the Internet.

The new accounting software must also be able to link with the outgoing systems through the API, in addition to having the ability to create an encryption stamp for electronic invoices with a specific identification code.

Apply the Qoyod cloud accounting system, which is the electronic invoice software approved in the Kingdom of Saudi Arabia, and try it for free to discover its power in managing and keeping your financial records and its ability to create electronic invoices with its approved form from the Zakat, Tax, and Customs Authority.