Today we see more and more countries digitizing their invoicing systems to gain clarity over their financials. Saudi Arabia is the most recent to join the list. On the 4th of December 2020, Saudi Arabia’s General Authority of Zakat and Tax (GAZT) issued electronic invoicing regulations (e-invoicing) mandating all residents and any third party that issues a tax invoice on behalf of a taxable resident must comply within 12 months, which is the 4th of December 2021.
GAZT hasn’t specifically shared the type of systems you need for e-invoicing but, they do provide the minimum requirements in order to generate e-invoices. You can view their minimum requirements in the frequently asked questions document here. This article will help you easily understand the new e-invoicing regulation.
Let's go over some of the key points to help you prepare for this new regulation.
What is e-invoicing?
According to the new regulation, a tax invoice electronically stored and generated through a tamper-proof system is considered an e-invoice. Any scanned or photo-copied invoices will not be considered as an e-invoice.
Will it affect you?
The new e-invoicing regulation affects all resident tax-payers as well as any third-parties that issue tax on behalf of residents. Residents and local businesses will be the main respondents in this regulation. Non-residents are not obligated to issue e-invoices.
This time is crucial for local businesses to get rid of manual paper-based invoicing methods and switch to digitizing their financial systems.
Why the sudden shift to e-invoicing?
This initiative aims to restrict the shadow economy, facilitate tax returns, adopt international standards, improve the kingdom’s global ranking, and promote fair business competition as well as consumer protection.
E-invoicing has a plethora of cost-saving benefits. The first thing that comes to mind is that we'll be using less paper, thus saving the environment.
Apart from that obvious benefit, businesses will easily be able to decipher invoices due to the new standardized structure, reduce any delays in payment caused by transcription errors, gain transparency between buyers and suppliers, and start to collect transactional data to manage their financials easily.
How can we prepare?
E-invoicing is not a hurdle but a facilitator to boost your business. Digitizing your financials is a big step in accelerating your business's growth. Businesses around the world, small and large, are realizing the benefits of digital transformation. SAP Business One and SAP Business ByDesign are the most comprehensive systems to digitizing and streamlining all your business operations. But digitizing is not the only goal you should have in mind. Seamlessly collaborating with internal and external ecosystems to efficiently generate e-invoices is crucial to be ready for the new mandate. Combing tailor-made SAP suites with Apigee is the most comprehensive solution to prepare for the new e-invoicing regulation. December 2021 is around the corner, and it's never too early to prepare.
We specialize in helping firms digitally transform their business and can help you comply with the new e-invoicing regulation well before December 2021. Our comprehensive tailor-made solutions, 800+ global SAP deployments, and top-tier partnership with SAP & Google Cloud will prepare your business for the new e-invoicing regulation while also providing you the competitive edge needed to grow beyond 2021. So, what are you waiting for?
Start e-invoicing today!
Contact us to learn how we help businesses prepare for mandatory e-invoicing.