ZATCA E-Invoicing: How to Ensure Your Restaurant is ZATCA Compliant

What is ZATCA?
The Zakat, Tax and Customs Authority, often shortened to ZATCA, is the government branch responsible for administering and enforcing Saudi Arabia’s tax and customs law, as well as managing the collection and distribution of zakat. 

What is the ZATCA E-invoicing Requirement for Restaurants?
In December 2020, ZATCA announced that electronic invoicing (E-invoicing) for all taxpayers subject to VAT, including restaurants, will become mandatory starting December 4, 2021. ZATCA had also issued the requirements and technical specifications with regards to e-invoicing regulations mid-2021.

The ZATCA e-invoicing mandate consists of two phases:

Phase 1 (Generation Phase): Enforced on December 4, 2021, phase one requires concerned taxpayers, which are restaurants and other businesses, to generate and store e-invoices and other associated electronic notes compliant with Phase 1 requirements.

This phase excludes non-resident taxpayers, but includes all other parties issuing tax invoices on behalf of suppliers subject to VAT.

Phase 2 (Integration Phase): The second phase, which was enforced starting January 1, 2023, is currently rolling out across several waves divided by different taxpayer groups or tiers. Additional technical and business requirements for e-invoices and electronic solutions are also shared with concerned taxpayers in phase two, including the integration of these electronic solutions with ZATCA’s systems.

Taxpayers who are about to be integrated in their respective phase two waves will be notified by ZATCA at least six months in advance.

You can read the simplified guide from ZATCA here.

What are the Violations and Fines for Non-compliance?
Non-issuance of e-invoices begin with a fine of SR 5,000, while the following violations below start with a warning:

• Failure to add the QR code in the simplified tax invoice
• Failure to include the VAT registration number of the facility that made the purchase in the tax invoice
• Failure to notify ZATCA of any malfunction that hinders the issuance of e-invoices

Deleting or amending e-invoices after their issuance is also a violation, and is fined with a starting sum of SR 10,000. While amounts vary, all fines are applied according to each type of violation and total number of repetitions.

How Sapaad Takes Care of the Requirements for Your Restaurant
Sapaad’s cloud-based POS and restaurant management system is fully compliant with ZATCA’s e-invoicing requirements. Through a Sapaad subscription, we’ll take care of your ZATCA e-invoicing compliance so you can avoid costly fines and other disruptions to your business.

Additionally, with our powerful suite of digital tools designed to improve your day-to-day operations, you can manage every aspect of your restaurant, drive growth, and enhance customer experience like never before. 

Book a free demo now to find out more!