Saudi e-invoicing and VAT terms, in plain language
Short, practical definitions of the words you meet when you invoice in Saudi Arabia, and what each one means for your business.
E-invoicing and ZATCA
ZATCA
ZATCA is the Zakat, Tax and Customs Authority, known for short as the Authority, and is the Saudi government body behind VAT and e-invoicing. It…
Fatoora portal
The Fatoora portal is ZATCA's e-invoicing platform and website. Under Phase 2, a taxpayer uses it to onboard an invoicing system, starting with a…
E-invoicing Phase 1 (generation phase)
E-invoicing Phase 1, the generation phase, has applied since 4 December 2021. Invoices must be issued and stored electronically in a structured…
E-invoicing Phase 2 (integration phase)
E-invoicing Phase 2, the integration phase, started on 1 January 2023 and reaches taxpayers in waves that ZATCA selects and announces. The…
Clearance
Clearance is the Phase 2 process for standard tax invoices: the invoice is sent to ZATCA first and issued to the buyer only after ZATCA accepts it…
Reporting
Reporting is the Phase 2 step for simplified tax invoices, the invoices issued to consumers. The invoice is handed to the customer at once and then…
CSID
A CSID is a digital certificate that your invoicing system receives during Phase 2 onboarding. You first receive a compliance CSID and use it to…
Onboarding OTP
The onboarding OTP is a one-time password that a taxpayer gets from the Fatoora portal to start Phase 2 onboarding. You enter it in your invoicing…
Invoices and documents
Standard tax invoice
A standard tax invoice is the full VAT invoice you issue when you sell to another business or to a government entity. Under ZATCA's Phase 2 it is…
Simplified tax invoice
A simplified tax invoice is the invoice you issue for sales to consumers, such as at a cafe till or a shop counter. You hand it over at once, then…
Credit note
A credit note is an e-invoice that reduces or cancels an invoice you have already issued, for example after a return or the correction of an…
Debit note
A debit note is an e-invoice that increases the amount of an invoice you have already issued, for instance when you undercharged or added a cost…
Invoice QR code
An invoice QR code is a square barcode shown on an e-invoice that holds its key data. In Phase 1 it contains the seller's name, the VAT registration…
Invoice UUID
An invoice UUID is the unique identifier of one e-invoice: a code that belongs to that invoice alone. It is one of the technical elements each Phase…
Invoice counter value (ICV)
The invoice counter value (ICV) is a running number that each Phase 2 e-invoice carries to show its place in the sequence of invoices your system…
Previous invoice hash (PIH)
The previous invoice hash (PIH) is the digital fingerprint of the invoice issued just before the current one. Each Phase 2 invoice stores it, which…
UBL XML
UBL XML is the structured data file, written in the UBL 2.1 format, that every Phase 2 e-invoice carries alongside its QR code and cryptographic…
VAT and records
VAT registration number
A VAT registration number is the 15-digit number that identifies a business registered for VAT in Saudi Arabia. It starts and ends with the digit 3…
VAT registration threshold
The VAT registration threshold is the level of annual taxable supplies that decides whether a business must register for VAT in Saudi Arabia…
Output VAT and input VAT
Output VAT and input VAT are the two sides of VAT. Output VAT is what you charge customers on your sales; input VAT is what you pay suppliers on…
Zero-rated supply
A zero-rated supply is a sale taxed at a VAT rate of 0% instead of 15%, for example an export of goods. The sale is still invoiced and recorded as a…
Exempt supply
An exempt supply is a sale that the VAT rules place outside VAT charging, so no VAT is added to the price. It is not taxed at 0%, which makes it…
VAT return
A VAT return is the periodic declaration a VAT-registered business files with ZATCA, summarising its sales, output VAT and input VAT for a tax…
Record retention
Record retention is the duty to keep invoices and tax records for a set number of years, so they can be produced if the Authority (ZATCA) asks. The…