Phase Two Integration and Connectivity Solutions with Wazen

With Wazen, a system approved by the Zakat, Tax and Customs Authority (ZATCA), we can prepare your company or establishment for Phase Two, which requires integrating systems with the electronic platform to review and approve issued invoices and send them to the issuing authority. This is achieved through an authority-approved system that helps issue invoices and automatically submit them to ZATCA, with the ability to store and retrieve them easily.

We are ready to provide comprehensive support to entities targeted in Phase Two, helping them connect with ZATCA and fulfill its requirements accurately to avoid violations and fines.

How to Activate E-Invoicing in Saudi Arabia

Through the Wazen system, we can explore the integration process step by step:

• Log in to ZATCA’s Fatoora platform here by entering the taxpayer identification number or using an email address registered with the Authority, then entering the password.
• Navigate to the option to configure a new unit and device, then select the option to generate a password, which is valid for one hour only.
• To renew the validity of the current Cryptographic Stamp Identifier (CSID), the password must be entered the first time only.
• View the list of technical solutions and devices, as well as the cancellation process, which includes all units configured by the taxpayer.
• Review the devices and units that have been added, or cancel any device easily by selecting it and clicking Cancel.
• View files and documents submitted by the taxpayer during the previous year by clicking on E-Invoice Statistics.
• To learn how to use the platform, refer to the API documentation, which includes guidelines for using the Developer Portal.

How to Prepare Your Organization for Phase Two of E-Invoicing

Discover Phase Two integration and connectivity solutions with Wazen through the following steps:

1. Create a Wazen account, log in, and then click on the company name.

2. Navigate to the account settings page, click on the Fatoora platform settings provided by the Zakat and Income Authority, and select Connect.

3. Enter your company's required information and verify its accuracy before clicking Connect.

4. Log in to the Fatoora platform and ensure that you are using ZATCA's actual platform, not the simulation platform.

5. If your company meets the Phase Two requirements, configure the unit or devices to generate a one-time password (OTP).

6. Copy the password and paste it into the Wazen accounting system to complete the integration process.

7. Complete the integration between Wazen's API and the Point of Sale (POS) system or Enterprise Resource Planning (ERP) system to enable fast data exchange.

8. We provide a simulation environment to test your company's systems when sending invoices and notifying ZATCA of any reports.

9. Once your systems have been verified as compliant with the Authority's requirements and conditions, you can begin using the tools we provide.

10. We generate unique codes and identifiers for each invoice to ensure they are used and stored in accordance with Phase Two e-invoicing standards.

What Are the Groups Covered Under Phase Two Implementation (Integration and Connectivity)?

Having outlined the Phase Two integration and connectivity solutions available through Wazen, it is important to identify the taxpayers required to integrate their systems with ZATCA. These are entities subject to Value Added Tax (VAT). They have been divided into the following groups:

1. Group One: All companies and establishments whose annual revenues exceeded SAR 3 billion in 2021. Phase Two implementation began on January 1, 2023.

2. Group Two: All taxpayers whose revenues exceeded SAR 500 million in 2021. Implementation began on July 1, 2023.

3. Group Three: All entities whose revenues exceeded SAR 250 million in either 2021 or 2022. Implementation began on October 1, 2023.

4. Group Four: All companies and establishments whose annual revenues exceeded SAR 150 million in either 2021 or 2022. Phase Two was implemented between November 1, 2023, and February 29, 2024.

5. Group Five: Taxpayers whose annual revenues exceeded SAR 100 million in either 2021 or 2022. Implementation took place between December 1, 2023, and December 31, 2024.

6. Group Six: Companies whose revenues exceeded SAR 70 million in either 2021 or 2022. Implementation began on January 1, 2024, and continued until April 30, 2024.

7. Group Seven: All companies whose revenues exceeded SAR 50 million in either 2021 or 2022. Implementation took place between February 1, 2024, and May 31, 2024.

8. Group Eight: Entities whose revenues exceeded SAR 40 million during the previously mentioned period. Implementation began on March 1, 2024, and continued until June 30, 2024.

9. Group Nine: All taxpayers whose revenues exceeded SAR 30 million were required to implement Phase Two between June 1, 2024, and September 30, 2024.

Advantages of Wazen's E-Invoicing System

We provide a powerful e-invoicing system in Saudi Arabia with the following features:

1. The system is approved by the Authority, free of charge, and has no limited usage period.

2. The system complies with Saudi Arabia's VAT laws and regulations.

3. We provide our customers with a simple user interface that requires no prior experience.

4. It can be integrated with all relevant cloud-based systems.

5. The system does not require software installation because it is cloud-based. It also offers automatic data saving.

6. All operations performed through the system comply with the standards and requirements established by the Authority.

7. The invoicing system allows users to save and print invoices, as well as store electronic notes.

8. The system allows users to record customer payments made in cash, by cheque, or through bank transfer.

9. We provide detailed reports on total sales movements over a specified period or sales of a particular product.

10. You can obtain a detailed report of the VAT amount for a specified period.

11. Our technical support team is available throughout the day to assist customers.

How to Choose the Best E-Invoicing Service Provider for Your Business

You can choose the best service provider in Saudi Arabia by considering the following criteria:

Providing an Integrated Accounting Software

Invoice issuance generally relies on an accounting system. Through our services, you can obtain accounting software to manage sales and purchasing operations and modify invoices electronically with ease, reducing the likelihood of human error.

Compliance with Data Security Regulations

We provide an integrated system that protects customer and supplier data, in addition to applying electronic signatures to invoices in accordance with high-level security protocols.

Compliance with Tax Filing Requirements

We offer an advanced system for companies and entities whose sales exceed SAR 375,000, enabling them to prepare reports and tax returns with a high degree of accuracy.

Keeping Up with Updates from the Zakat, Tax and Customs Authority

Conducting business in Saudi Arabia requires continuous compliance with the updates issued by the Authority. Therefore, it is essential to choose a service provider that keeps up with ongoing developments and regularly updates its system to meet new standards and requirements.

Ease of Use and Immediate Technical Support

It is preferable to work with a service provider that offers detailed explanations on how to use the system to all its customers, in addition to providing ongoing technical support to save time and effort.

Invoice Customization

The system should offer invoice formats and features suitable for each customer, whether a simplified tax invoice or a standard tax invoice. It should also allow users to add invoice line items through simple steps that accommodate the nature of each customer's business.

Automatically Sending Invoices to the Zakat Authority

You need a system that allows electronic invoices to be submitted to the Authority for review and approval before the seller sends them to the buyer. Notably, we provide this feature automatically to save time.

Multiple Payment Options

We provide a variety of payment methods so that your customers can choose the option that suits them, helping increase sales and support business continuity.

Detailed Sales Reports

You should have access to detailed sales reports on a dedicated page to monitor sales invoices, inventory, and supplier transactions.

What Is the E-Invoicing Workflow in Phase Two for Simplified Tax Invoices Between a Business and a Consumer (B2C)?

To understand how this type of invoice works, follow these steps:

1. The seller must issue an electronic invoice containing all the required elements for this type of invoice.

2. The seller delivers the invoice to the buyer by sending it to them.

3. The seller retains the electronic invoice.

4. A service provider is used to submit the invoice to the Authority within 24 hours of issuance.

What Is the E-Invoicing Workflow in Phase Two for Tax Invoices Between Businesses (B2B)?

Tax invoices between businesses are processed according to the following steps:

1. The seller must issue an invoice containing all the required elements of a tax invoice.

2. The invoice is submitted to the Zakat, Tax and Customs Authority by activating the integration between the company and the Authority.

3. The Authority reviews the invoices, verifies their validity, and sends them back to the seller with an electronic signature.

4. A copy of the invoice approved by the Authority is sent to the buyer.

5. Electronic invoices must be retained to avoid penalties and fines.

What Are the Penalties for Violations of Phase Two E-Invoicing Requirements?

The following are examples of violations and fines that targeted entities may face:

1. A fine of SAR 5,000 for failing to issue and retain electronic invoices.

2. A fine of SAR 10,000 for modifying or deleting any data in an electronic invoice.

3. If a problem prevents electronic invoices from being issued and the entity fails to notify the Authority, a fine of SAR 10,000 may be imposed along with a warning.

4. Failure to include the QR code on invoices may expose the establishment to a warning and a fine of SAR 10,000.

Frequently Asked Questions About Phase Two of E-Invoicing

To help you avoid legal liability resulting from non-compliance with the Authority's laws and requirements, we provide detailed answers to common questions about the e-invoicing system below.

If I Create an Invoice Electronically in EXCEL or Scan It Using a Scanner, Is the Document Considered an Electronic Invoice?

No. For an electronic invoice to be recognized as such, it must comply with the standards and requirements established by the Authority.

What Are Electronic Notes?

Electronic notes consist of credit notes and debit notes.

What Is a Cryptographic Stamp?

A cryptographic stamp is an electronic stamp generated using specialized algorithms to verify the authenticity of the data and the origin of the invoice, ensuring compliance with the Authority's requirements for integrating the relevant establishments.

Is It Necessary to Issue Electronic Invoices for Government Transactions or Exports?

Yes. An establishment must issue electronic tax invoices for commercial transactions conducted with government entities, as well as for export transactions.

Is There a Free, Authority-Approved Technical Solution and Electronic System for Issuing E-Invoices?

Through the Wazen platform, you can access a cloud-based e-invoicing system approved by the Authority because it complies with its standards and requirements.

To sign up for the free trial now, register with us here.

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