November 17, 2023

The Zakat, Tax, and Customs Authority announced the ninth group within Phase 2 of electronic invoicing in the Kingdom of Saudi Arabia. Accordingly, Saudi companies registered under VAT that generated more than 30 million Saudi riyals during the years 2021 or 2022 fall under Group 9 within the second stage. They must link and integrate their ERP/POS with the Zakat, Tax and Customs Authority’s invoice portal as of June 1, 2024.

With this announcement ZATCA authority ended the year 2023, it gave companies owners a year to integrate their systems to ZATCA and to issue their correct electronic bills, so let's start from the beginning and learn all the basics about ZATCA integration.

what’s ZATCA E-invoice integration?

Electronic Invoicing is a procedure that aims to convert the issuing of paper invoices as well as credit and debit notes into an electronic process that allows the exchange and processing of invoices, credit, and debit notes in a structured electronic format between the buyer and seller.

The integration stage is where the taxpayer’s electronic invoicing systems must be linked with the Zakat, Tax and Customs Authority system (fatora platform) and electronic invoices must be issued in the required format.

Understanding ZATCA E-invoicing in KSA 

ZATCA E-invoicing is being done in two phases

The first phase (as of December 4, 2021):

The first stage requires taxpayers to issue and save invoices electronically through an electronic invoicing system compatible with the requirements of the Zakat, Tax and Customs Authority. The first phase began as of December 4, 2021, for all persons subject to the electronic invoicing regulations and any other party issuing the tax invoice on behalf of suppliers subject to VAT.

The second phase (effective as of January 1, 2023, in a phased manner):

The second stage is known as the integration stage, where the taxpayer’s electronic invoicing systems must be linked with the Zakat, Tax and Customs Authority’s system (fatora platform) and electronic invoices must be issued in the required format.​​ It will be implemented in a phased manner, and the Zakat, Tax, and Customs Authority will notify taxpayers of the second stage in 6 months.

Key benefits of ZATCA integration.

Zatca integration can open the door to many benefits that will help businesses and the Saudi economy.

•Reduces the cost of the invoicing process.

•Prevents human error in the invoicing process.

•Enhances digitalization in the supply chain.

•Improves accounting and bookkeeping.

•Enhances business ecosystem with enriched fair competition and consumer protection through the provision of a unified process for validating and auditing invoices

•Reduces hidden economy transactions.

•Reduces commercial concealment by increasing requirements related to invoice

•tracking and data retention.

•Enriches the consumer experience and digitizes the consumer-supplier relationship

•Increases compliance with tax obligations through enhanced verification of business transactions.

The right ERP system should be used for the best results and a complete integration.

Microsoft Dynamics 365 is a clear choice for businesses of all sizes across the globe. Businesses have gained so many benefits from its amazing functions.

SD-IT can help you launch your Microsoft Dynamics ERP system and also help you integrate your E-bills through ZATCA with the best prices.

ZATCA’ FATOORA Portal’ Electronic Invoicing integration in Microsoft Dynamics 365 Finance and Operations system methodology by SD-IT.

Integration and configuration through below:

• Setup ZATCA integration Parameter
• Setup ZATCA integration setup
• Customize the Microsoft Address of the customers to have the same E-Invoice requirements
• Collect the invoices by Batch in one pool by batch processing
• Send the Invoices electronically to ZATCA’s FATOORA portal from the D365 F&O system
• Send invoices by batch processing for a group of invoices or / send Manual one-by-one
• Receive FATOORA Portal response per each invoice
• Customized Invoices forms:

                  Adjust the invoice formats to have the new QR Code received from ZATCA

As a trusted Microsoft partner and ZATCA e-invoicing solution provider, our specialists can help you connect your D365 Finance app to the ZATCA portal, ensuring 100% compliance.

As a leading e-invoicing software provider in Saudi Arabia, SD-IT SERVICES offers ZATCA an e-invoicing solution that works with your Dynamics 365 ERP system and provides a seamless e-invoicing experience in Saudi Arabia. We provide solutions to help businesses in Saudi Arabia achieve compliance with ZATCA Electronic Invoicing Phase 2 requirements so contact us here.