For grocery and supermarket owners: Everything you need to know about E-invoice

Saudi Arabia began implementing the electronic billing system in several stages starting in December 2020. By January 1, 2023, all business owners, including certainly grocery, supply and supermarket owners, were obligated to issue electronic invoices to buyers and save them electronically instead of traditional paper invoices.

Starting from this date, a new phase has also begun to be gradually implemented, which is linking and integrating electronic billing systems with the General Authority of Income and Zakat. In this article, we will answer the questions you need to know about the electronic invoice as a grocery or supermarket owner. So we advise you to follow the article until the end, so that you do not miss important information.

What is the difference between electronic billing, electronic billing systems and electronic invoice?

Most likely, you may have heard or come across any of these three terms, but did not know the difference between them. We will explain the difference between the three terms in a simplified manner below:

1. E-invoicing

It is a system that aims to transform the process of issuing and saving paper invoices and notices for commercial activities into an electronic process, which allows the exchange of invoices and debit and credit notices in an integrated electronic system. This is done through two stages:

• The first stage (issuance and storage): During which tax invoices and related debit and credit notices are issued and saved electronically. This stage began to be implemented in December 2021, and it became obligatory for commercial activities starting from January 1, 2023, to issue and save invoices electronically, and deliver a copy of the invoice to the buyer, whether an individual or a company.

• The second stage (linking and integration): During which electronic invoicing systems are fully linked and integrated with the systems of the Zakat and Tax Authority (Fatora platform), to share the electronic invoice with the Fatora platform automatically within a period not exceeding 24 hours. This stage began to be implemented in January 2023, and this stage is being implemented in multiple stages.

Six months before each stage, the Zakat and Tax Authority notifies a specific segment of business owners to whom the system applies, so that they are ready after the end of the six months to fully link and integrate their electronic invoicing systems with the Fatura platform.

2. E-invoicing solutions

These are the devices, systems, electronic applications, networks, means of linking, storing and exchanging information related to issuing invoices and related credit and debit notices electronically, such as cash registers and points of sale in supermarkets. Simply put, they are the tangible devices (hardware) used to conduct and implement the electronic invoicing process.

3. E-invoice

It is an electronic invoice issued and saved in a unified electronic format via an electronic system, and contains the requirements of the tax invoice. It must be issued in Arabic as the primary language according to the requirements of the Zakat and Income Authority, and English can be added as a second language optionally. A handwritten or scanned invoice is not considered an electronic invoice.

What is the importance of the electronic invoice?

The electronic invoice achieves several benefits, both for the Saudi economy and for individuals subject to the electronic billing system regulations. The most important of these benefits are the following:

• Reducing the costs of issuing invoices.

• Eliminating human errors when issuing the invoice.

• Improving the quality of accounting and digital bookkeeping (digital transformation).

• Improving and enhancing fair competition and consumer protection, by providing a unified mechanism through which invoices are documented and audited.

• Eliminating the hidden (informal) economy within Saudi Arabia.

• Eliminating commercial cover-up, by setting additional requirements related to following up on invoices and retaining data.

• Increasing the rate of tax compliance, by improving the process of verifying commercial transactions.

What are the types of electronic invoices?

The electronic invoice is divided into two types, as follows:

1. Simplified tax invoice (B2C)

The simplified tax invoice is often issued between the establishment (such as a grocery store or supermarket) and the consumer (B2C). The Zakat and Income Authority requires that all mandatory fields and elements be included in the electronic invoice in order, as follows:

• Invoice title: The phrase "Simplified Tax Invoice" is written in it, as long as the transaction is between an establishment and a consumer.

• Invoice number: This means the serial number of the issued invoice.

• Store name: The store name must match the name on the registered store sign.

• Store address: The store address is identical to the same address recorded in your data on the Balady platform, which you wrote when issuing the commercial license, so that all data is identical or unified when reviewed.

• Date: The date of issuance of the invoice is written in it, in day, month, and year.

• VAT Registration Number: It is the tax number of the establishment that you added on the Zakat and Tax Authority platform, and it consists of 15 numbers.

• Total Amount (the field in milk color): The total amount of the product is written in it, including VAT.

• Total Taxable Amount: The total amount for all products purchased by the consumer before calculating VAT.

• Value Added Tax (15%): VAT alone (which represents 15% of the total taxable amount).

• Total with Tax: The sum of the "Total Taxable Amount" with "Value Added Tax", which is the final amount that the consumer (customer) will pay to the establishment.

• QR Code: It is an electronic code that, when scanned, displays a summary of the simplified tax invoice.

2. Tax Invoice (B2B)

The tax invoice is issued between one establishment and another (between a vegetable and fruit supply company and a supermarket, for example). The Zakat and Income Authority requires that all mandatory fields and elements be included in the electronic invoice in order, as follows:

• Invoice title: The phrase "Tax Invoice" is written in it as long as the transaction is between an establishment and another B2B establishment.

• Serial number: This includes the serial number of the invoice.

• Date: This represents the date and time of issuing the invoice, in seconds, minutes, hours, days, months, and years.QR Code: This is an electronic code that, when scanned, displays a summary of the tax invoice.

• Seller information: This is information about the party that sells its product or service to the other party (buyer). This information includes: the seller's name, the seller's address, the seller's VAT registration number, and the seller's commercial registration number.

• Buyer information: This is information about the party that purchases the product or service from the other party (seller). This information includes: the buyer's name, the buyer's address, the buyer's commercial registration number, and the buyer's VAT registration number.

• Subtotal without tax: This represents the total amount of a product or service without VAT.

• Tax value: Represents the value of the value-added tax (15% of the subtotal without tax).

• Total including VAT: We add the "subtotal without tax" with the "tax value".

• Total: It includes the total amounts of products or services without calculating the tax.

• Value Added Tax (15%): Represents the value of the value-added tax (15% of the total value).

• Total with Tax (15%): The sum of the "total" and "Value Added Tax (15)", which is the final amount that the buyer will pay to the seller.

Finally, as a grocery, supplies or supermarket project owner, you must commit to implementing the electronic billing system so that you are not exposed to financial violations or the risk of closing your business.

If you are looking for an integrated system for issuing electronic invoices that is compatible with the regulations and requirements of the Zakat and Income Authority, contact us now and get a trial copy of the Grocsale program dedicated to managing grocery and supermarkets in an integrated manner and with amazing features.