Regulatory updates - Saudi Arabia

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.

The Zakat, Tax and Customs Authority (ZATCA) has announced an extension of its Cancellation of Fines and Exemption of Financial Penalties Initiative for taxpayers.

To benefit from the initiative, which applies to all tax laws in the Kingdom, taxpayers must register under the relevant tax laws, submit all previously unfiled returns, and pay the principal tax debts associated with these returns. An instalment payment plan is available, provided the application is made within the initiative’s timeframe, and all instalments are paid on schedule. However, penalties related to tax evasion and fines paid before the initiative's start date are excluded from this exemption.

Taxpayers are encouraged to review the detailed guidelines on ZATCA’s website for more information on penalty types, including conditions for benefitting from the exemption and steps for instalment payments.

On 24 May 2024, ZATCA (Zakat, Tax and Customs Authority) announced the threshold for taxpayers included in the twelfth wave. This group are required to integrate their e-invoicing solution with the Fatoora platform between 1 December 2024 and 28 February 2025.

The wave includes taxpayers with revenues subject to VAT exceeding SAR 10 million (ca. EUR 2.5 million) during 2022 or 2023. 

ZATCA will notify taxpayers in the scope of the twelfth wave.

On 26 April 2024, ZATCA published the criteria for the eleventh wave of Phase 2 (Integration Phase). Selected taxpayers have revenues subject to VAT greater than SAR 15 million (ca. EUR 3.7 million) during 2022 or 2023.

This taxpayer group in scope will have time until 31 January 2025 to adhere to the e-invoicing regulation.

Pagero continues to follow the Kingdom of Saudi Arabia’s progress in introducing electronic invoicing. Stay tuned for more updates in .