Electronic Invoice Generator

ZATCA (Zakat, Tax and Customs Authority) e-invoicing, known as "Fatoora," is a comprehensive electronic invoicing system launched in Saudi Arabia to transform traditional paper-based invoicing into a fully automated digital process. Phase 1 began on December 4, 2021, requiring all VAT-registered taxpayers to generate and store invoices electronically through ZATCA-compliant systems that meet specific technical requirements set by the authority.

The system aims to enhance transparency in commercial transactions, reduce tax evasion, and streamline audit processes. Phase 2 (Integration Phase) requires direct connection of invoicing systems with ZATCA's platform for real-time data sharing and validation. Electronic invoices must include essential elements such as QR codes, seller VAT identification number (TIN), issue date, VAT amount, and total amount including all mandatory fields specified in the technical guidelines.

The system covers two types of invoices: standard tax invoices (for B2B transactions between businesses) and simplified tax invoices (for B2C transactions with consumers). Compliance with e-invoicing requirements is mandatory, and non-compliance penalties start from SAR 5,000. Use our free invoice generator to create invoices that comply with all ZATCA requirements easily and professionally, ensuring your business stays compliant with Saudi regulations.

Creating a tax invoice that complies with ZATCA regulations requires adherence to several essential standards and requirements. First, the invoice must contain complete seller information including: trade name, address, 15-digit VAT identification number (starting with 3 and ending with 0003), and commercial registration number. Buyer details are mandatory for standard tax invoices used in business-to-business transactions.

Second, each invoice must have a unique sequential number that is never repeated, along with a clear issue date in both Hijri and Gregorian calendars. The invoice must display a detailed breakdown of each line item including: product or service description, quantity, unit price, applicable VAT rate (typically 15%), and the VAT amount per item. The bottom section shows the subtotal, total VAT amount, and the grand total payable by the customer.

Third, a QR code is mandatory for simplified tax invoices and contains encoded data including: seller name, VAT number, date and time of issuance, invoice total, and total VAT amount. These requirements ensure traceability and authentication of each invoice. Use our electronic invoice generator to create professional invoices that automatically meet all these requirements, with the ability to print and save as PDF for your records and client distribution.

ZATCA has established specific requirements for VAT invoices in Saudi Arabia to ensure tax compliance and enhance transparency. Invoices are divided into two main types: standard tax invoices used in business-to-business (B2B) transactions requiring detailed seller and buyer information, and simplified tax invoices for business-to-consumer (B2C) transactions that require fewer mandatory fields but still must meet minimum compliance standards.

Mandatory requirements for a standard tax invoice include: a clear "Tax Invoice" heading, unique sequential number, issue date, name, address, and VAT registration number for both seller and buyer, detailed description of each good or service with quantity and unit price, applicable tax rate for each line item, total amount excluding VAT, VAT amount, and total amount including VAT. Any tax exemptions must also be clearly indicated with the relevant legal reference for the exemption.

When transactions involve foreign currencies, amounts must be converted to Saudi Riyals using the exchange rate approved by the Saudi Central Bank (SAMA) on the date of supply. Invoices must be retained for a minimum of 6 years for tax and audit purposes. Non-compliance with these requirements exposes businesses to fines starting from SAR 5,000 and potentially reaching SAR 50,000 per violation, making proper invoice generation essential for all businesses.

Proper invoice management is crucial for small and medium enterprises in Saudi Arabia. Here are essential tips to improve your invoicing process: Use a clear and organized sequential numbering system for your invoices to facilitate tracking and auditing. Set aside a specific weekly time to review outstanding invoices and follow up on collections to ensure healthy cash flow for your business operations.

It is essential to maintain digital copies of all issued and received invoices, organized in folders by month and year. This simplifies the VAT return filing process and provides quick reference when needed. Always verify the tax number and client details before issuing each invoice to avoid errors that could lead to invoice rejection or payment delays. Consider implementing a double-check system where invoices are reviewed before being sent to clients.

Take advantage of free tools like our electronic invoice generator to create professional invoices without additional costs. Clearly define payment terms on every invoice (e.g., Net 30 days) and include bank transfer details to facilitate easy payment by your clients. Ensure timely submission of VAT returns according to ZATCA deadlines to avoid fines and penalties. Keep records for at least 6 years as required by law, and consider using cloud backup for your invoice archives to protect against data loss.