E-invoicing has emerged as a transformative force in the Middle East, gaining momentum across various countries as they race towards adopting this digital alternative. Headed by Saudi Arabia, the region is witnessing a surge in interest and implementation, with countries like the United Arab Emirates (UAE), Qatar, Bahrain, Jordan, Oman and Egypt following suit.
In this blog, we will delve into the motivations behind this shift, the general advantages of E-invoicing, and the specific strategies each country is employing.
A Brief Overview of E-Invoicing:
E-invoicing involves managing invoices electronically in a structured manner, bringing forth numerous benefits such as streamlined data management, accelerated invoice lifecycles, and compliance with tax laws.
Moreover, this digital transformation reduces operational costs, enhances cash flow, and mitigates the risks of fraud and errors. E-invoicing is a global trend that governments follow to regulate the flow of transactions.
E-Invoicing in the Middle East:
Saudi Arabia set the pace for E-invoicing in the Middle East, initiating a structured plan executed by the Zakat, Tax, and Customs Authority (ZATCA). The implementation occurs in phases, with the second phase requiring all invoices to be integrated with the Fatoorah platform.
Saudi Arabia:
Saudi Arabia has rolled out E-invoicing in two phases, with specific timelines for different waves. The second phase mandates integration with the Fatoorah platform and invoices must adhere to a structured format set by the Zakat, Tax, and Custom Authority (ZATCA).
United Arab Emirates (UAE):
The United Arab Emirates (UAE) government has proposed a mandatory e-billing system for business-to-business (B2B) transactions starting July 2025. This means that all businesses in the UAE will be required to issue and receive electronic invoices for all B2B transactions.
Qatar:
In Qatar, businesses can voluntarily create electronic invoices, with mandatory implementation yet to be confirmed. Tax E-invoices must comply with VAT regulations, and businesses issuing them must register with the Qatar Tax Authority (QTA).
Bahrain:
The National Bureau of Revenue (NBR) has not announced any formal implementation timeline yet. However, it is expected that NBR will implement e-invoicing in Bahrain in the next 18 months. e-Invoicing in Bahrain will be appliable to:
- VAT-registered businesses
- Third parties issuing tax invoices on behalf of other taxable persons
The applicability may vary depending nature of the business, annual turnover, number of transactions, etc.
Jordan:
The Income and Sales Tax Department (ISTD) has introduced a nationwide e-invoicing solution in Jordan. Aligned with the provisions of the Income Tax Law No 38 of 2018, the e-invoicing system issues invoices in compliance with the established regulations. Each document is preserved in a well-organized electronic format, incorporating the necessary conditions of a tax invoice, as stipulated by the billing affairs and control system.
Oman:
The Sultanate of Oman Tax Authority plans to launch a voluntary Value Added Tax (VAT) e-invoicing system in April 2024. The system is expected to become mandatory for large entities operating in the country in October 2024. The technical specifications of the system and the e-invoicing model have not been disclosed yet.
Egypt:
Egypt has adopted E-invoicing in phases, covering various sectors. Full implementation is set for 2024, with mandatory compliance for all businesses to connect with the tax authority by July 2023.
Conclusion:
The Middle East is undergoing a significant digital transformation in invoicing, with E-invoicing proving to be more than a trend. As countries move towards mandatory adoption, businesses need to prepare for these changes to ensure seamless compliance.
E-invoicing is directing the region toward a more streamlined, transparent, and technologically advanced business environment. For more information, contact us at: +91 7303393220