Invoicing goes digital in the Kingdom of Saudi Arabia - FATOORAH

What is FATOORAH?

FATOORAH is the Kingdom of Saudi Arabia’s (KSA) brand new e-invoicing project, set to be launched in two phases, the first phase set to begin on December 4, 2021. 

The project is one of many steps towards the digital transformation of all transactions in the KSA, which would effectively bring down hidden economy transactions and enable fair competition.

E-Invoicing in a Nutshell

An electronic invoice is a tax invoice generated in an electronic format, through electronic means. 

Electronic invoicing, or e-invoicing as it is called, aims to convert the issuing of paper invoices and notes into an electric process where the exchange of invoices, credit notes & debit notes between the hospital and its patients take place in a structured format through an electronic solution. 

On the other hand, a paper invoice that is converted into an electronic format through copying, scanning, or any other method is not considered an electronic invoice.

E-invoicing has numerous benefits. Here are a few of them:

• Reduced staff workload for routine invoice generation
• Reduced processing times
• Minimum number of mistakes as a result of minimized manual effort and increased automation
• Better customer service as e-invoices are more convenient for the customer too
• Reduced paper consumption leading to reduced costs
• Easier tracking of invoices
• Customization of invoices made easy

How to Prepare for Phase 1?

Before December 4, all taxpayers, excluding non-resident taxpayers, must be subject to FATOORAH regulation by abiding by the following three steps:

1. To stop issuing manual invoices including handwritten invoices and invoices written using text editing tools. 
2. To use an electronic invoicing solution that complies with the requirements and specifications published under the e-invoicing laws and regulations. These can be summarized as follows:
   
   • Ability to generate e-invoices with the required elements including QR codes.
   • Ability to timestamp the e-invoice copies archived in the solution.
   • Absence of prohibited functionalities. This includes having uncontrolled access, software time change, tampering of e-invoices or logs, and multiple invoice sequences.​
3. To ensure invoices include the required additional fields. 

• • If it is a tax invoice, it must include the VAT registration number of the buyer if the buyer is a registered VAT taxpayer.
  • If it is a simplified tax invoice, a mandatory QR code generated by the taxpayer’s e-Invoicing solution based on ZATCA’s (The Zakat, Tax and Customs Authority) specifications must be present. 

How Should Healthcare Establishments Prepare for Phase 1?

If you are part of a healthcare establishment such as a hospital or medical center, here are a few things you can do to ensure you are ready for Phase 1 of FATOORAH:

1. Understand the requirements of e-invoicing. 
2. Use an e-invoicing solution that is compliant with the regulations. 
3. Test your solution before December 4 to make sure the invoices are issued correctly.
4. Create awareness amongst your staff and ensure they are familiar with your e-invoicing solutions​​​.

When is Phase 2 Beginning?

Phase 2, also known as the Integration phase, begins from January 1, 2023, and will involve the introduction of the technical and business requirements for electronic invoices and the solutions that generate them, along with the integration of these electronic solutions with ZATCA’s systems. 

Insta is ready for Phase 1 of FATOORAH. We are now listed by ZATCA as an indicative vendor who has passed the qualification process and criteria required to enable healthcare providers to meet the e-invoicing regulatory requirements. We help you export e-invoices to local archives with file names containing the VAT number, invoice number, and invoice dates. 

Book now for a free demo!