How Saudi e-invoicing works

For a company in Saudi Arabia, every confirmed customer invoice and credit note is a tax invoice for ZATCA, the Zakat, Tax and Customs Authority. Creating, confirming and paying an invoice are explained in Customer invoices.

Two phases

Phase 1 comes with the Saudi accounting package, the company's Package in Accounting settings. On every confirmed customer invoice and credit note it stamps the ZATCA Issue Date (tab Other Info: the invoice date at the current Riyadh time), fills an empty Delivery Date with the invoice date, and prints the Saudi layout: Tax Invoice or Simplified Tax Invoice, the VAT of each line, the totals with and without VAT, the Supply Date, and a QR code with the seller, its VAT number, the issue time, the total and the VAT. An invoice dated after today in Riyadh is refused, and the PDF of a confirmed invoice cannot be deleted.

Phase 2 is this module. Each sales journal is connected to ZATCA once (Connect a sales journal to ZATCA); from then on every invoice, credit note and debit note confirmed in it becomes a signed XML file (UBL 2.1) sent to ZATCA. The module ticks ZATCA (Saudi Arabia) under Electronic Data Interchange in the Advanced Settings tab of every Saudi sales journal, and no invoice of such a journal can be confirmed before the journal is connected.

Standard and simplified invoices

The client decides, through Person or Company at the top of the contact form:

The journey of an invoice

Confirm first checks what ZATCA requires (connected journal, company VAT number and address, a tax on every line, no future date, the client's identification, the reason of a credit or debit note) and refuses with the list of what is missing. The confirmed invoice then shows Electronic invoicing: To Send. A background job builds the XML, signs it with the company's key and the journal's certificate and sends it; ZATCA's answer turns the invoice to Sent, or leaves it To Send with a banner and a note in the chatter. What each answer means and what to do: Send an invoice to ZATCA.

The chain

ZATCA reads the invoices of a journal as a chain: each carries a counter and the fingerprint of the previous one. An invoice that got no answer keeps its place, and the next invoices of the same journal wait behind it with Blocking Invoice. A rejected invoice leaves the chain and takes a new place when it is sent again. Connecting a journal again starts its chain over.

The three API modes

Sandbox is ZATCA's shared test environment, Simulation (Pre-Production) a test environment of the company's own, Production the live one, where every accepted invoice counts in the VAT liability. The mode belongs to the company, and changing it disconnects all its journals.

When sending happens

The scheduled action EDI: Perform web services operations sends the waiting invoices, twenty per run, and starts again while some remain.

• When: right after every confirmation, and once a day. Process now on the invoice, or To ZATCA in the Send dialog, sends one at once.
• How to stop it: an administrator deactivates it among the scheduled actions of the technical menu; invoices then stay To Send until Process now. A rejected invoice is never retried by the job: it waits for Retry.

What gets locked

• No cancellation at ZATCA: Request EDI Cancellation never appears on a Saudi invoice. A credit note corrects an invoice.
• In Production, an accepted invoice cannot be reset to draft, and after the first one the mode can no longer change. In every mode, an invoice that got no answer cannot be reset to draft until it gets one.
• The PDF made after acceptance and a rejected XML cannot be deleted.

What the module adds to other screens

• Addresses in Saudi Arabia: Building Number, Plot Identification and the district on the second street line; Identification Scheme and Identification Number (commercial registration, national ID, Iqama and others), printed under the address on the PDF.
• Taxes (Accounting/Configuration/Accounting/Taxes): Exemption Reason Code on 0% sales taxes, filled by the Saudi chart, and Is Retention on negative sales taxes (withholding). The default taxes are in Set the default taxes.

Who may do what

What it does not do

It does not touch vendor bills, does not send the invoice to the client (Customer invoices) and does not file the VAT return: the tax figures of a period are read in the tax report of Accounting reports.