Zakat, Tax and Customs Authority

The General Authority of Zakat, Tax, and Customs (ZATCA)

هيئة الزكاة والضريبة والجمارك
Agency overview
Formed	June 14, 1951 (1951-06-14)
Jurisdiction	Government of Saudi Arabia
Agency executive	Suhail Abnami, Governor
Parent department	Ministry of Finance
Website	zatca.gov.sa/en/

The General Authority of Zakat, Tax, and Customs (ZATCA) (Arabic: هيئة الزكاة والضريبة والجمارك) is a government agency under the Ministry of Finance in Saudi Arabia that is responsible for the assessment and collection of taxes and zakat, a form of obligatory almsgiving in Islam. ZATCA was established on 14 June 1951 as department under the Ministry of Finance.

ZATCA is headquartered in Riyadh and consists of the Taxpayer Department and 19 branches distributed over the main cities in the country.

ZATCA has introduced ZATCA phase 2 with additional features

Fatoora Platform

The Fatoora Platform is an electronic invoicing (e-invoicing) system developed by ZATCA to streamline the invoicing process and enhance compliance with tax regulations in Saudi Arabia. Launched on 24 August 2021, the platform facilitates the digital issuance and management of invoices across all sectors, significantly reducing the administrative burden and improving transparency. It requires integration with taxpayers' existing ERP/POS systems to generate, track, and manage e-invoices. The Fatoora platform is part of Saudi Arabia's broader Saudi Vision 2030 initiatives aiming to digitize economic and governmental infrastructures.

The Zakat, Tax, and Customs Authority (ZATCA) in Saudi Arabia has implemented Phase 2 of its e-invoicing initiative, known as Fatoora, to enhance tax compliance and digital transformation. This phase, effective from January 1, 2023, mandates VAT-registered businesses to integrate their systems with ZATCA’s Fatoora portal for real-time invoice submission and validation, ensuring transparency and reducing tax evasion.

Key Features of Phase 2

• Real-Time Integration: Businesses must connect their ERP, POS, or billing systems to ZATCA’s Fatoora portal via APIs for real-time invoice clearance and reporting.
• Security Measures:
  • Cryptographic Stamps: Ensure invoice authenticity and prevent tampering.
  • QR Codes: Required for invoice verification, especially for simplified tax invoices.
  • Universally Unique Identifier (UUID): Assigns a unique identifier to each invoice.
  • Invoice Reference Number (IRN): Tracks invoices for compliance.
• Invoice Types:
  • Standard Tax Invoices: For B2B and B2G transactions, requiring real-time clearance by ZATCA.
  • Simplified Tax Invoices: For B2C transactions, reported to ZATCA within 24 hours.
  • Credit/Debit Notes: Must comply with ZATCA’s electronic format and security standards.
• Compliance Waves: Rolled out based on business turnover, starting with businesses exceeding SAR 3 billion in 2021 (Wave 1) and progressively including smaller businesses, with Wave 22 (turnover exceeding SAR 1 million) set for December 31, 2025.

Solution Providers

Several companies offer API-based solutions to simplify ZATCA Phase 2 compliance:

• stackcue:
  • Provides a powerful API for seamless ERP integration with ZATCA’s Fatoora portal.
  • Features include Compliance CSID and Production CSID generation, invoice submission status tracking, and centralized reporting for multiple devices or branches.
  • Supports various programming languages and software systems for flexible integration.
  • offers cloid based solution with error handling and archiving XML
  • Suppotts XML and OPDF/A-3 generation using API
• Pagero:
  • A ZATCA-qualified provider offering a cloud-based network for secure invoice exchange.
  • Supports XML and PDF/A-3 formats, digital signatures, and legal archiving compliant with Saudi regulations.
• Seidor:
  • Specializes in SAP Business One integration, providing automated XML invoice generation and real-time ZATCA validation.
  • Includes QR code generation, cryptographic seals, and error validation for compliance.

Benefits of Compliance

• Streamlined Processes: Automates invoicing, reducing manual errors and workload.
• Enhanced Security: Cryptographic features ensure data integrity and prevent fraud.
• Transparency: Real-time reporting improves tax compliance and audit efficiency.
• Penalty Avoidance: Compliance prevents fines ranging from SAR 1,000 to SAR 40,000.