ZATCA E-Invoicing Phase 2: A Smooth Takeoff for Travel Agencies in Saudi Arabia
The Introduction
ZATCA in partnership with GAZT launched e-invoicing or Fatoorah in 2021 as part of the Saudi Arabian Kingdom’s commitment to modernizing tax compliance through technology.
As the Kingdom of Saudi Arabia moves fast towards a complete digital transformation, the leap from e-invoicing Phase 1 to Phase 2 marks a pivotal shift for the economy’s digitization, particularly impacting the taxation processes across industries.
Phase 2, advancing the groundwork laid down by Phase 1 to the next stage, introduces a comprehensive e-invoicing framework. In this context, TRAVEL AGENCIES like any other business understand their technical complexities and adapt to an increasingly digitized regulatory environment, by embracing Phase 2 of ZATCA’s e-invoicing with the RIGHT SOLUTION PARTNER as it aids them to ensure to:
- stay compliant,
- improve operational efficiency, and
- remain competitive.
This blog post equips you as a travel agent, to armor up with the essential information to navigate ZATCA E-Invoicing Phase 2 smoothly. We’ll explore the waves of Phase 2, key requirements, potential challenges, and the right solution to guarantee stress-free compliance: a seamless integration solution that has been tailor-developed for the travel industry.
The Phases of E-Invoicing by ZATCA
E-invoicing or Fatoorah was rolled out in two phases in Saudi Arabia.
Phase 1
A glimpse of Phase 1 has been provided below:
| Phase | Description |
| PHASE 1 – 04 DEC 2021 TO 31 DEC 2022 | Applicable entities shall create electronic invoices and corresponding credit notes and debit notes in compliance with the applicable regulations and guidelines |
For details on the e-invoicing guideline from ZATCA Phase 1, CLICK HERE.
Phase 2
Building upon the foundation laid by Phase 1, Phase 2 of ZATCA’s e-invoicing regulations mandates a comprehensive e-invoicing framework. This means integrating your agency’s system with ZATCA and electronically transmitting invoices, credit notes, and debit notes.
Phase 2 of e-invoicing or Fatoorah regulations from ZATCA is being implemented in several waves based on your travel agency’s revenue.
So, ideally, what are the waves?
Let’s have a look through the revenue criteria for the applicability and adoption of ZATCA Phase 2 and the timeline for adoption:
| Waves | Criteria for Applicability | Timeline |
| 1 | Entities with revenue or turnover above SAR 3 billion during 2021 | 1-Jan-23 to 30-Jun-23 |
| 2 | Entities with revenue or turnover above SAR 500 million but below SAR 3 billion during 2021 | 1-Jul-23 to 31-Dec-23 |
| 3 | Entities with revenue or turnover above SAR 250 million during 2021 or 2022 | 1-Oct-23 to 31-Jan-24 |
| 4 | Entities with revenue or turnover above SAR 150 million during 2021 or 2022 | 1-Nov-23 to 29-Feb-24 |
| 5 | Entities with revenue or turnover above SAR 100 million during 2021 or 2022 | 1-Dec-23 to 31-Mar-24 |
| 6 | Entities with revenue or turnover above SAR 70 million during 2021 or 2022 | 1-Jan-24 to 30-Apr-24 |
| 7 | Entities with revenue or turnover above SAR 50 million during 2021 or 2022 | 1-Feb-24 to 31-May-24 |
| 8 | Entities with revenue or turnover above SAR 40 million during 2021 or 2022 | 1-Mar-24 to 30-Jun-24 |
| 9 | Yet to be announced | 1-Jun-24 to 30-Sep-24 |
As the roll out of Phase 2 is in waves, it is vital that you as a travel agent know your specific wave and also the deadline such that there is a timely adoption and compliance ensured for eliminating any associated penalties.
So, how is ZATCA e-invoicing different for travel agents? Let’s look into the details:
Travel Agents and e-invoicing (Fatoorah)
The travel industry is one of the industries with billions of transactions per day. Ranging from holiday booking to business trips to hotel and cab booking, the travel industry is ‘on’ 24×7.
This in turn places hidden pressure on the travel industry to deploy a mid-back-office system that holds the technical capability to seamlessly integrate all its functionalities. Additionally, it is also vital that the system holds the capability to ensure automated adherence to the compliances particular to the country they are functioning in.
Hence, the adoption of a system that is customized for the travel industry and predominantly the travel agents is a pulse point for the travel players. This will aid them in ensuring adherence to the e-invoicing (Fatoorah) by ZATCA with limited or 0% errors.
Unlocking the Smooth Take-Off with the Right Solution Partner
As per the announcement of ZATCA in November 2021, the penalty or fine for the violation and non-issuance of e-invoicing begins from SAR 5,000. Further, the penalty for deleting or amending e-invoices post-issuance begins from SAR 10,000 and the total amount will be based on the violation and the number of its repetitions.
Subsequently, with the Phase 2 announcement along with the waves from 1 to 8, the complexity and amount of applicable penalty would increase with severity. Thus, all the resident taxpayers should assess their applicability criteria and the time limit for implementation of the ‘integration’ phase of e-invoicing (Fatoorah).
However, entering into the implementation with the right armor is important, such that there are no pitfalls and penalties that increase the cost of compliance with a minimal or no additional resource allocation required.
Currently, the market is full of solutions that offer an easy and seamless adoption of ZATCA Phase 2. However, not all of them understand and cater to the unique requirements of the travel agencies.
So, imagine having a mid-back office system for your travel agency that understands the unique needs of the travel industry and the pain of travel agencies.
TRAACS from Nucore is one such solution that has been curated by the experts exclusively for travel agents. It is your one-stop solution that can aid you in ensuring adherence to the ZATCA e-invoicing (Fatoorah) with 0% errors and a seamless direct automated integration with the ZATCA-Fatoorah Portal.
Let’s understand how:
TRAACS aids travel agents in the Saudi Arabian market to ensure adherence with the e-invoicing (Fatoorah) TODAY by:
1.
Seamless Onboarding:
The taxpayer accesses the ZATCA-Fatoorah portal and generates the required number of OTP’s by clicking on the ‘Onboard New Solution Unit/Device option’. The OTP is then entered into the mid-back office system of your travel agency to ensure an effortless connection with the portal. Subsequently, a smooth integration and onboarding process is ensured.
2.
Automated e-invoice generation:
Automated generation of e-invoice in XML format and uploading in the ZATCA-Fatoorah Portal in the below models:
- Tax invoices – Clearance model
- Simplified invoices – Reporting model
3.
Direct ZATCA Integration:
Direct integration with ZATCA-Fatoorah Portal enables single as well as batch storing and processing of invoices for cryptographic stamping on clearance.
4.
Real-Time Communication:
Ensuring integration with ZATCA-Fatoorah Portal for real-time submission of invoices, debit notes, and credit notes along with receipt of responses.
5.
Automated Hashing:
Automated generation of ‘HASH’ based on the Standard Secure Hashing Algorithm along with UUID and apply it on the invoice for enhancing the data integrity.
6.
Data Security:
Ensuring data privacy and security while integrating with the ZATCA Portal with the secure integration protocols.
7.
Streamlined Funds:
Automation of refund process with a centralized computation and processing of credit note and VAT on service or administrative fee for refund/ re-issue/ no-show/ re-booking.
Conclusion
Now imagine adopting a travel-focused solution that can aid your travel agency with seamless integration and handling of compliance with ZATCA e-invoicing. This also provides you with an opportunity to keep away all those generic solutions available in the market.
Tempting?
We know!!
That’s why the market today is keen on developing solutions that are travel industry and travel agency-specific.
TRAACS being one of the major players in the market with more than a decade of experience in Saudi Arabia and serving 100+ travel agents in the market, understands the extensive reformation initiatives of the Government and the importance it holds in regenerating a strong economy.
Hence, we collaborate and work at the ground level with our clients to develop and deliver new features as per the announcements from the Saudi Arabian Government.
TRAACS offers you effortless onboarding, automated e-invoice generation, direct ZATCA integration, and much more.
But explore your market and navigate through the available e-invoicing solutions, to make an informed decision and get ready to integrate and implement the ZATCA Phase 2.
Start here and connect with us today for expert guidance and get equipped!!
CLICK HERE to request a free demo.
