Saudi Arabia launches a B2G electronic invoice implementation plan. The country has shown interest and recently opened a public consultation on the introduction of a VAT electronic invoice declaration regime.
The General Authority of Zakat and Taxes of Saudi Arabia (GAZT) aims to oblige taxpayers to pay the State’s VAT, introduced in 2018, which will also contribute to the reduction of tax evasion in the country.
In addition, the Saudi Tax Authority also wants to help taxpayers with digital transformation to make the tax payment obligations as easy and convenient as possible.
Previous authorization model
The consultation on a B2G electronic invoicing regime was scheduled for October 17, 2020. In it, different models will be analyzed to change from the current paper-based system to a complete regulation of VAT through electronic invoicing.
Thereby, it seems that Saudi Arabia seeks to copy the success of the Italian SDI and apply a model that requires the previous authorization of the Tax Authority for sales and credit invoices. Initially, it would only apply to national taxpayers residing in the country and non-residents would be excluded.
Benefits for companies
The implementation of a B2G electronic invoicing system would bring multiple benefits to Saudi companies. The digitization and automation of invoices make it possible to optimize internal processes and, at the same time, reduce the workload of the administrative team, thanks to the elimination of manual and repetitive tasks.
In addition, they would also obtain extra benefits such as major visibility and traceability of invoices and reduction of operational costs.
The implementation of this model is comparable to many of its neighbouring countries, such as Egypt, where the government has also shown its interest in a B2G electronic invoicing management system.
