In the era of modern technology, electronic and technical developments are important in all aspects of life, and in light of this progress, the beginning of the application of the electronic invoice came, which reflects the Kingdom’s commitment to innovation and technological progress. This system aims to simplify the business process and reduce administrative burdens on companies and institutions, as well as enhance tax compliance and combat tax evasion. The Saudi e-invoice is characterized by many attractive features, as it provides speed and ease in issuing invoices and sending them to customers via the Internet, and it also allows maintaining accurate and up-to-date records of commercial transactions, which contributes to improving transparency. Financial tracking, and in this article we will learn successively when to apply electronic invoicing, so follow us.
The beginning of the application of the electronic invoice
Before listing the date of applying for the Saudi electronic invoice for the first time, we must first know what the electronic invoice is. It is a modern development aimed at simplifying and improving the process of issuing invoices and storing them in a secure and organized manner. It differs from traditional handwritten invoices or those scanned by a scanner as they are issued and saved in electronic form through an integrated system. While talking about the beginning of the application of the electronic invoice, it was in two stages, namely:
First stage
This stage began on December 4, 2021, and is connected to the issuance and filing phase, in which all people subject to the electronic invoicing legislation, including their representatives, can issue electronic invoices.
These invoices are issued in the same manner as traditional invoices, with the exception that they are processed through a suitable electronic invoicing system and include all of the needed features based on the kind of invoice.
Second stage
The second phase of electronic invoice application began on January 1, 2023, requiring the integration of the electronic solution with the Zakat, Tax, and Customs Authority’s system. At this stage, electronic invoices must be issued in the required format in accordance with legal and regulatory requirements.
Ensures seamless connectivity between the electronic solution and the Zakat, Tax, and Customs Authority’s system, ensuring compliance with all tax regulations and instructions.
Types of electronic invoices
The types of electronic invoices vary according to the purpose and target party of the invoice, which are as follows:
Tax invoices
Tax invoices are issued between two companies (B2B) or between a company and a government entity (B2G), and these invoices are not directed to the final consumer but are used in commercial transactions between commercial parties or between companies and government agencies.
A tax invoice is defined as an invoice that contains specific tax and commercial information, has a legal form organized in accordance with the tax regulations in force in the country concerned, and typically includes information such as the company’s tax registration number, details of products or services provided, value-added tax (VAT), and the total amount of the invoice.
Simplified invoices
Simplified invoices are issued to the final consumer, and their value is typically less than a specific amount, such as 1000 riyals, and the specific value varies by country. Simplified invoices have simpler data than tax invoices, and they are concerned with recording simple and small transactions.
Simplified invoices usually contain information such as the name and address of the supplier and customer, details of the products or services offered, applicable prices, and also the total amount payable.
Is e-invoicing obligatory in Saudi Arabia?
Yes, the e-invoice is required in Saudi Arabia for all individuals subject to value-added tax (VAT), as well as any other parties generating tax invoices on behalf of VAT-subject vendors. Excluded from this obligation are taxable persons and non-residents.
Who’s obliged to apply the electronic invoice?
The electronic invoicing system has been implemented. In order to improve the efficiency of the tax collection process and facilitate the tax control process, and according to the decision issued, the concerned parties must apply electronic invoices in several cases, including:
Tax evaluators
Tax evaluators must be aware of the commencement of the use of the electronic invoice, and the tax evaluator is the person who conducts commercial, financial, and economic operations in the country, for which he must use electronic invoicing for all tax invoices issued or received.
Interpersonal (B2B) tax invoices
The decision includes interpersonal (B2B) tax invoices, which are invoices sent or received by the taxpayer to and from other parties engaged in commercial and economic activity. These parties must also use electronic invoices and comply with their requirements.
Simplified tax invoices (B2C).
The ruling covers simplified tax invoicing between people and the government (B2C), as well as commercial transactions between individuals and government entities, in which the parties involved must also use electronic invoices.
Note
The concerned parties must apply debit and credit notices electronically, as these notices are used to record transactions related to discounts and dues between different parties, and the application of electronic invoices in this context enhances transparency and accuracy in recording these transactions.
Example
If there is a retailer whose annual revenue is more than half a billion Saudis, he must know that he will be obliged to implement the second phase of electronic invoicing, so he should prepare by choosing an accounting program that complies with the standards of the Zakat, Tax, and Customs Authority, such as the Qoyod program.
Read More :Advantages and importance of the electronic invoice program.
Do I have to use cloud accounting software to apply the electronic invoice?
No, cloud accounting software is not required to be used in order for e-invoicing to be applied in the Kingdom of Saudi Arabia, as persons subject to the e-invoicing regulation are allowed to use any system or technical solution that complies with the requirements of the General Authority of Zakat and Tax to issue electronic invoices, but although the software is not required, it is better for you to use it, and among those programs is the Qoyod program, because of its many benefits that will benefit you.
The importance of using the Qoyod program in the application of the electronic invoice
The Qoyod program must be used from the start of the electronic invoice application process, as it plays an important role in ensuring the safety and effectiveness of the process of issuing electronic invoices, as well as compliance with specific legal requirements. The program’s benefits include:
Ease of use
Qoyod provides an easy and simple user interface, allowing users to issue electronic invoices quickly and easily, even for individuals with limited technical expertise.
Compliance with legal requirements
Since the inception of the implementation of the Saudi e-invoice, compliance with a set of rules and regulations specified by the General Authority of Zakat and Tax (GAZT) requires compliance with a set of rules and regulations specified by the General Authority of Zakat and Tax, and the program provides the necessary tools and features to ensure full compliance with these requirements.
Full compliance with new requirements
There may have been changes in laws since the beginning of the implementation of the electronic invoice in the Kingdom of Saudi Arabia, so companies and institutions must update their systems and programs to comply with these changes, and it is worth noting that the Qoyod program enjoys regular updates to ensure full compliance with the new requirements.
Accuracy and reliability
Qoyod is a reliable and accurate tool for issuing electronic invoices, as it improves data accuracy and reduces potential human errors, ensuring the provision of accurate information to customers and stakeholders.
Full control
Qoyod provides a high level of control and supervision over the process of issuing electronic invoices, as users can assign different permissions to employees, allowing access control and effective control of the billing process.
Security and Protection
Security and protection are critical from the very beginning of the implementation of the electronic invoice, and Qoyod provides a secure system that protects company and customer data and ensures the confidentiality of sensitive information.
Qoyod also follows high security standards and uses encryption and protection techniques to maintain data integrity.
Integration with other systems
Companies and institutions may have other systems and programs that they use in managing financial and accounting operations; for this reason, the Qoyod program works to integrate with these other systems, which facilitates the flow of data and information between different systems.
Conclusion
The electronic invoice has been successfully implemented in the Kingdom of Saudi Arabia to improve and facilitate trade and money operations. This significant step reflects the Kingdom’s commitment to digital transformation, increases transparency and efficiency in the commercial sector, saves time and effort in issuing and managing invoices, reduces human errors, and avoids manipulation.
It is worth noting that by using this invoice, businesses can record and store transactions in a secure and organized manner, which facilitates tax audits and control, and the exchange of electronic invoices allows businesses to link their accounting system with the added tax system, which contributes to the simplification and improvement of tax announcement and submission procedures.
The electronic invoice in Saudi Arabia is an innovative and reliable solution to improve the efficiency of business processes, so apply it while using the Qoyod accounting program. It is worth noting that the program also offers all its customers: electronic invoice systems, as well as the point of sale system, stores, and customers.
After knowing when the e-invoice was launched, which companies are obligated to implement this invoice, and many other things, try Qoyod now for free for 14 days if you want to be in the lead.
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