Regulatory updates - Saudi Arabia

On January 31, 2025, the Saudi Tax and Customs Authority (ZATCA) released the criteria for the twentieth wave of taxpayers in the Phase 2 e-invoicing obligation scope.   

This group encompasses taxpayers with annual revenues subject to VAT exceeding 1.5 million SAR (approximately 385,000 EUR) in 2022 or 2023.  Taxpayers in scope must integrate with the FATOORA platform no later than October 31, 2025, to adhere to the Phase 2 requirements. 

ZATCA will contact the affected taxpayers to ensure they are prepared to comply with the obligations by the specified deadlines. 

On December 29, 2024, the Zakat, Tax and Customs Authority (ZATCA) informed that it had decided to extend its Cancellation of Fines and Penalties initiative until June 30, 2025.

To be eligible for the exemption, taxpayers must be registered under relevant tax laws, submit any previously non-submitted returns and pay all principal tax debt associated with the returns. Taxpayers may also request installment payment plans and are encouraged to follow the guidelines published on the ZATCA website, which contain further details on the initiative.

The Saudi Tax and Customs Authority (ZATCA) has announced that the nineteenth group of taxpayers must adhere to the integration phase of the e-invoicing obligation. 

The group includes taxpayers with taxable annual revenue exceeding 1.75 million SAR (ca. 456.000 EUR ) in 2022 or 2023. The taxpayers must issue e-invoices and integrate with the FATOORA platform by September 30, 2025.

ZATCA will contact taxpayers in the scope.

The Zakat, Tax and Customs Authority (ZATCA) published on the 29 November 2024, the scope of the taxpayers that are obliged to issue e-invoices and connect with ZATCA’s platform (FATOORA) as part of Phase 2 of the e-invoicing mandate.  

Taxpayers included in the group are those with the annual revenue, subject to VAT, exceeding SAR 2 million (approximately EUR 504 000) in 2022 or 2023, those taxpayers must integrate with the FATOORA platform by 31 August 2025 the latest. 

All affected taxpayers will be accordingly notified by ZATCA, to allow their timely compliance with the above obligation.   

On 1 November 2024, the Zakat, Tax and Customs Authority (ZATCA) released the criteria for the taxpayers included in the seventeenth wave of Phase 2 of Saudi Arabia's e-invoicing mandate.

This group includes businesses whose annual revenue is subject to VAT and exceeds SAR 2.5 million (approximately EUR 616 000) in 2022 or 2023. To comply with Phase 2 of the mandate, these taxpayers are required to integrate with the FATOORA platform by 31 July 2025.

ZATCA will notify affected taxpayers to ensure they are informed and prepared to fulfil these requirements by the specified deadline.

On 27 September 2024, the scope for the sixteenth wave of taxpayers was announced.

This group encompasses taxpayers with a revenue liable to VAT exceeding SAR 3 million (ca. EUR 730 000) in 2022 or 2023. These taxpayers must integrate with the FATOORA platform between 1 April 2025 and 30 June 2025.

ZATCA will notify the concerned taxpayers.

This group encompass taxpayers with revenues subject to VAT exceeding SAR 4 million (ca. EUR 960 000) during 2022 or 2023. They are now obliged to issue e-invoices and integrate their e-invoicing solution with the FATOORA platform between 1 March and 31 May 2025. 

ZATCA will contact targeted taxpayers in this wave.

On 28 August 2024, ZATCA released proposed amendments to the VAT Implementation Regulations, open for public consultation until  17 September 2024. Overall, the changes aim to:

• Align tax procedures with international best practices;
• Enhance tax refund policy efficiency;
• Improve compliance to help taxpayers meet obligations;
• Support the Kingdom's tourism sector.

The amendments affect 26 articles, including their sub-provisions of the current VAT law. Key highlights include:

Timeframe for issuing credit and debit notes

The new text aligns the issuance timeframe for credit and debit notes with that of tax invoices, requiring them to be issued no later than fifteen days after the month following the date on which the event occurs.

Tax group registration requirements

The amendments simplify registration by focusing on residency, economic activity, ownership/control criteria, and more.

Nominal supplies

The changes clarify several aspects of nominal supplies, with one specifying that they are treated as supplies for consideration unless stated otherwise, unlike the previous text, which referred only to provisions in the VAT agreement.

For full details on the amendments, please visit the Istitlaa platform here. 

On 26 July 2024, ZATCA published the threshold for the selected taxpayers required to integrate with the Fatoora platform from 1 February 2025. This group encompasses taxpayers whose revenues subject to VAT exceeded SAR 5 million (ca. EUR 1.2 million) during 2022 or 2023.

Taxpayers included in scope will be contacted by ZATCA.

The selected taxpayers in the thirteenth wave of the Integration Phase are those with revenues subject to VAT exceeding SAR 7 million (ca. EUR 1.7 million) during 2022 or 2023. ZATCA will notify the taxpayers in scope.

This wave is scheduled to start on 1 January 2025, and taxpayers have to comply by 31 March 2025.