Saudi VAT invoices: what tax and simplified invoices must contain

Saudi VAT invoicing has two main document types. A tax invoice, sometimes called a standard invoice, is the full document for sales to other businesses and to government entities. A simplified tax invoice is used for sales to consumers, such as a till receipt in a shop, a clinic reception desk or a restaurant counter.

Which one applies depends on who the buyer is, not on the size of the sale. VAT is charged at the standard rate of 15% on most supplies, while some supplies are zero-rated or exempt. Both documents must be electronic under e-invoicing Phase 1, and neither can be edited or deleted after it is issued.

A standard tax invoice identifies both parties and describes the sale clearly enough for the buyer to account for it. In practice that means the seller's name, address and VAT number, the buyer's name, address and VAT number, an invoice number and date, and a description of each item or service with quantity and unit price. The more precise the description, the fewer questions and corrections later.

It then shows the amount before VAT, the VAT rate and amount for each line or tax category, any discount, and the total payable. Under Phase 2 it also carries a QR code. A consulting firm billing a company for a project milestone, or a property manager billing a company tenant, issues this kind of invoice. For the exact list of required fields, check ZATCA's guidance for your type of supply.

• Seller name, address and VAT registration number
• Buyer name, address and VAT registration number
• A unique sequential invoice number and the issue date
• Description, quantity and unit price of each item or service
• Amount before VAT, VAT rate, VAT amount and the total

A simplified tax invoice carries less detail because the buyer is a consumer, not a business reclaiming VAT. It typically shows the seller's name, address and VAT number, the date and time of the sale, a description of the goods or services, and the total with the VAT amount. The buyer's details are generally not needed, because the priority is to complete the sale quickly at the till.

Its distinguishing feature is the QR code, which encodes basic invoice data such as the seller's name, VAT number, timestamp, the total and the VAT amount, so the invoice can be read by scanning. A pharmacy counter, a salon reception and a restaurant till all issue these. Under Phase 2, simplified invoices are also reported to ZATCA within 24 hours of issue.

• Seller details: name, address and VAT number
• Date and time of the sale
• Description of the goods or services sold
• Total including VAT, and the VAT amount
• A QR code generated from the invoice data

Because an issued invoice cannot be edited or deleted, mistakes and changes are handled with a separate document. A credit note reduces what the customer owes, for example after a return, a discount agreed later or an item billed twice. A debit note increases it, for example when an extra charge was left off the original invoice.

Both notes are e-invoices in their own right: they show the VAT effect of the change and refer back to the original invoice. Under Phase 2 a note is cleared or reported depending on whether the original was a standard or a simplified invoice. Never overwrite the original; keep both documents together.

Most supplies carry the standard 15% rate, which has applied since July 2020, but some are zero-rated or exempt. They are not the same: a zero-rated supply is taxable at 0%, while an exempt supply falls outside VAT charging altogether, and the difference can affect how you recover VAT on your purchases. Each invoice line should show its correct VAT treatment.

An invoice can mix treatments, so the VAT summary should break the amounts down by category. Whether a particular product or service is standard-rated, zero-rated or exempt is a question for your accountant or ZATCA's guidance, not for guesswork at the point of invoicing.

Issue invoices in one unbroken sequence and let the system assign numbers rather than typing them. A bilingual layout lets Arabic-speaking and English-speaking customers read the same document. Fatooraz issues bilingual Arabic and English tax invoices and simplified invoices at the 15% rate, with a QR code on simplified invoices, and produces VAT reports for your accountant.

Keep invoices and related records for the legally required period, generally six years, and confirm the exact requirement with your accountant. Rules and specifications evolve, so check ZATCA's latest announcements and ask your accountant before relying on any summary, including this one, for a decision about your own invoices.