Impact of e-Invoicing on KSA’s Banking System
From December 4, 2021, the General Authority of Zakat and Tax (GAZT) of the Kingdom of Saudi Arabia made e-invoicing mandatory. This mandate aims to decrease the shadow economy, improve tax compliance, and encourage ethical business practices. E-invoicing must be implemented in two stages, according to GAZT. For starters, firms must be able to create and keep tax invoices and notes in a structured electronic format without having to deal with the tax authority directly. Second, the taxpayer's e-invoicing software must be able to interact with GAZT systems and shift to a clearance-based compliance model that allows GAZT systems to transmit real-time data. This rule applies to all businesses who are liable to pay taxes in the Kingdom of Saudi Arabia, as well as third parties who issue tax invoices on behalf of residents. Companies, especially banks must be prepared for a variety of situations, including the likelihood that real-time permission for individual invoices and transactio...