The General Authority of Zakat and Tax (GAZT) is now termed as The Zakat, Tax and Customs Authority. The GAZT issued the E-invoicing Regulations on 04/04/1442 AH.

The said regulations were issued in line with the Kingdom’s one of vital vision for legislative development and bring e-technology linking all internal departments and sectors of Ministries and its sub-ordinate government entities. This initiative is aimed to bring an organized system to regulate and curtail the violations by breaching the laws in the Kingdom in general.

Article No. (3) of the Regulations specified the persons subject to the Regulations, as follows:

• Taxable person that is a resident in the Kingdom.
• The customer or any third party that issues a tax invoice on behalf of the taxable person that is a resident in the Kingdom according to the VAT Implementing Regulations.

Persons subject to this Regulations in accordance with paragraph (A) of this article must issue Electronic Invoices in respect of all their transactions, which require the issuance of tax invoices, in addition to issuing Electronic Notes in cases that is required by the VAT Law and its Implementing Regulations.

Persons, who are not resident in the Kingdom, are not required to issue Electronic Invoices or Electronic Notes for supplies or amounts received, which are subject to tax in the Kingdom.

The kingdom is bringing new procedures on digital and technical integration in formulation of transaction documents and encouraging the dependency on e-documents, with that said it is expected to curb the forgery and tampering of documents.

Further, Article No. (5) of the Regulations specified the technical specifications and procedural rules of the E-invoicing.

According to said article, persons subject to the provisions of this Regulations must adhere to the minimum of the standards, requirements, technical specifications, and procedural rules stipulated in this Article, in relation to Electronic Invoices and Electronic Notes, as follows:

• The technical solution used to issue Electronic Invoices and Electronic Notes must be able to connect to the Internet.
• The technical solution used to issue Electronic Invoices and Electronic Notes shall be able to connect with external systems using the Application Programming Interface (API).
• The technical solution used to issue Electronic Invoices and Electronic Notes is tamperproof and should include a mechanism that allows to detect any tampering performed by the user or any other/third party.
• The technical solution used to issue Electronic Invoices and Electronic Notes shall consider all requirements and controls which relate to data or information security or cybersecurity applied in the Kingdom.

The Governor may specify any controls, requirements, technical specifications or additional procedural rules related to the Electronic Invoices and Electronic Notes, including those related to issuance, processing, transmission, recordkeeping, integration with electronic invoicing systems, and the exchange or sharing of data or information related to them. For the purpose of this above article, the technical solution includes the hardware, software, networks, integration means, maintain and exchange of information associated with the Electronic Invoices and Electronic Notes.

In our insight publication we will highlight to the reader the requirements, details, and measures on the linking of E-invoicing systems.

The above insight is given for a mere understanding of the regulation to the readers and it is not a legal advice.