Taxes and e-invoicing in Saudi Arabia: a practical guide | Hesabat

Saudi Arabia applies VAT at 15% on most goods and services, administered by ZATCA. Companies are subject to zakat or income tax depending on ownership, with periodic filing and disclosure obligations to the authority. Saudi e-invoicing (Fatoora) is mandatory in phases: the generation phase started in December 2021 and the integration phase in January 2023, with waves expanded over time by revenue threshold.

Key points

• A clear tax picture Know the tax type, its rate and how it is calculated on each invoice.
• Organised invoices Issue, number and archive invoices electronically for easy reference.
• Ready-made reports Period tax reports drawn from the same data, with no manual gathering.
• Digitisation impact Move from paper invoices to a digital cycle linked to your ledger.

Common challenges

• Relying on scattered invoices makes period tax totals hard to assemble.
• Paper invoices are easily lost and hard to archive and reconcile.
• Hard to see each invoice's status and the amounts due or paid.
• The tax impact on results is unclear before the period closes.

How the software helps

• Prepare the tax invoice The invoice is prepared with the required tax fields inside the system in Saudi Arabia.
• Automatic tax calculation Tax is calculated per line and totalled at invoice and report level.
• Invoice lifecycle Track statuses: draft, issued, paid or cancelled, with the reason for each.
• Linked to accounting Every invoice posts an entry and updates customer and inventory balances automatically.
• Archive and search A searchable invoice archive by customer, amount, date and tax number.

Frequently asked questions

What is the VAT situation in Saudi Arabia?

Saudi Arabia applies VAT at 15% on most goods and services, administered by ZATCA.

Is electronic issuance mandatory?

Saudi e-invoicing (Fatoora) is mandatory in phases: the generation phase started in December 2021 and the integration phase in January 2023, with waves expanded over time by revenue threshold.

What is the entry price in this market?

The Starter plan begins at 99 Saudi riyal per month in Saudi Arabia, with a 14-day trial.