4.1. Introduction and Objectives of Reporting and Clearance
The primary objective of the Reporting and Clearance functionalities is to allow all Taxpayers subject to e-invoicing in the Kingdom to submit their e-invoices, credit or debit notes to ZATCA. The documents need to be submitted by the Seller in most cases with the exception of Self-Billed documents which need to be submitted by the Buyer.
Once Taxpayers׳ EGS have been successfully onboarded and have obtained their unique Cryptograph- ic Stamp Identifiers (CSIDs), they will be able to submit e-invoices, credit and debit notes to ZATCA׳s FATOORA platform using APIs. As mentioned earlier in the Onboarding section, the EGS can continue to submit e-invoices, credit or debit notes as long as the:
● Associated CSID has not expired
● Associated CSID has not been revoked either by the Taxpayer itself or as a result of VAT De-regis- tration or Suspension (due to joining a VAT Group)
● Associated CSID was obtained for the correct Functionality Map
● 1000 for Standard documents only (B2B)
● 0100 for Simplified documents only (B2C)
● 1100 for both Standard (B2B) and Simplified documents (B2C)
Similar to the Integration Sandbox, the Reporting and Clearance process is completely an API driven process, i.e. after an EGS has been successfully onboarded, it will communicate directly with the FATOORA platform without the need to login to the FATOORA portal.
4.2. Reporting and Clearance Overview
As mentioned above both Reporting and Clearance are two different e-invoicing transactions between Taxpayer׳s EGS units and ZATCA׳s FATOORA platform using APIs. The sharing of the e-invoices, credit or debit notes between the Seller and Buyer happens outside of this interaction that is not controlled by ZATCA.
The FATOORA Platform is the ZATCA system that:
● receives these documents via API from the Taxpayer׳s E-invoicing Generation Systems (EGS)
● processes and validates submitted documents as part of the Clearance and Reporting in line with the standards mentioned above
● sends back the outcome of the validations to the Taxpayer׳s EGS (and additionally key events and failure points will be communicated using notifications)
● stores valid and accepted documents (with warnings) for ZATCA.
The primary requirement for Taxpayers for Reporting and Clearance is to have compliant E-invoice Generation Solutions (EGS) which have been onboarded and associated with unique Production Cryp- tographic Stamp Identifiers (PCSIDs) before they can start submitting generated e-invoices, credit or debit notes to FATOORA Platform.
As with the Onboarding, Taxpayers need to be registered for VAT in order to submit e-invoices, credit or debit notes to ZATCA. The FATOORA Platform will automatically revoke PCSIDs associated with VAT Taxpayers who have been de-registered or suspended (after joining a VAT Group). In case of the latter, the VAT Group will need to re-onboard the EGS of all members and obtain PCSIDs which are associat- ed with the VAT Registration Number (TRN) of the VAT Group. The Representative Member of the VAT Group is responsible for initiating the Onboarding, Renewal and managing of the Revocation processes.
4.3. Description of the Reporting and Clearance Processes
Taxpayer׳s EGS unit(s) must submit their documents to ZATCA in the XML format and not in the PDF A/3 format.
A Standard Invoice, Standard Credit Note and Standard Debit Note are collectively referred to as “Stan- dard Documents” (B2B).
Similarly, A Simplified Invoice, Simplified Credit Note and Simplified Debit Note are collectively referred to as “Simplified Documents” (B2C).
The processing first involves validating the documents based on the following:
● Business rules in the XML Implementation Standards, Data Dictionary and E-invoicing Resolution
● Additional referential checks which are additional validations performed
● Exception handling which offers some tolerances to the outcomes of the validations by treating some errors as warnings without rejecting the submitted document entirely.
There are three potential outcomes of the validations:
● Invalid document - The document has at least one fatal error that results in it not being considered as a valid document
● Accepted document with warnings - The document has no fatal errors but has at least one warn- ing that results in it not being considered as a compliant document (note that this is essentially the outcome of the exception handling mentioned above) however one that can still be considered as an accepted document
● Valid / complaint document - The document has no fatal errors and no warnings that results in it being considered as a valid document.
Taxpayers are encouraged to make suitable arrangements with an EGS service provider for resolving the errors or warnings notified by ZATCA׳s FATOORA Platform in a timely manner.
Additionally for invalid documents, the FATOORA Platform generates a hash of the entire document including UBL extensions and stores this as a reference and as a comparison point.
In the case of Standard documents (B2B), the FATOORA Platform applies a cryptographic stamp on behalf of ZATCA as well as a QR code during Clearance process.
Along with the storage, the FATOORA Platform sends the response back to the Taxpayers׳ EGS based on the following:
|
Outcome |
Standard Documents (B2B) |
Simplified Documents (B2C) |
|
Valid Document |
Send the Document back to the Tax- payer׳s EGS along with the applied ZATCA cryptographic stamp and QR code string |
Send a confirmation back to the Taxpayer׳s EGS via API response that the document is valid |
|
Accepted Document with warnings |
Send the Document back to the Tax- payer׳s EGS along with the applied ZATCA cryptographic stamp, QR code string and the warning mes- sages |
Send a confirmation back to the Taxpayer׳s EGS that the document has been accepted along with the warning messages |
|
Invalid Document |
Send a response back to the Tax- payer׳s EGS stating that the docu- ment was rejected along with the error message/s |
Send a response back to the Taxpayer׳s EGS stating that the document was rejected along with the error message/s |
Taxpayers must generate documents in a single sequence per EGS that it has onboarded and this se- quence applies to both Standard (B2B) and Simplified (B2C) documents it has generated. The Previous Document Hash (PDH) of a document should always be equal to the Hash of the last document that generated prior to the Submission. Note that documents need not be submitted in the same sequence as they were generated as long as the PDH in the document always refers to document of the last document that was generated. The PDH must be maintained even in the case of documents which were rejected by ZATCA׳s FATOORA platform as the platform does record the document hash of rejected submissions.
4.3.1. Reporting
As mentioned above Reporting applies for Simplified documents (B2C) which are generally applica- ble for B2C (Business to Consumer) transactions. Accordingly, ZATCA׳s E-invoicing regulations allow
Taxpayers (Sellers) to submit their Simplified Documents (B2C) within 24 hours of the transaction being completed.
In that respect, the Reporting process involves:
-
The Seller generates an e-invoice, credit or debit note for a transaction using its EGS
-
The Seller submits the document to ZATCA׳s FATOORA Platform using the Reporting API within 24 hours
-
The FATOORA Platform validates the submitted document against ZATCA specified standards and specifications
-
Depending on the validations, the submission is either:
-
Accepted as a valid document which is sent as a confirmation in the API response
-
Accepted with one or more warning(s) which is (are) listed in the API response
-
Rejected with one or more error(s) which is (are) listed in the API response
-
Steps 1-4 are repeated with the next submission.
Notes:
• In the case of 4(1) and 4(2) above, the FATOORA Platform stores the submitted docu- ment (excluding any additional fields over and above the ZATCA specifications) along with any warning details.
• The Seller must include its Cryptographic Stamp and QR code as part of the submis- sion. ZATCA’s FATOORA Platform does not stamp Simplified documents (B2C).
• For warnings or errors, the Taxpayer must reach out to its Solution Developer / Provider and can leverage ZATCA’s published XML Implementation Standards, Data Dictionary, Security Features, Compliance and Enablement Toolbox (SDK or Web based Validator) and/or Integration Sandbox to ensure the compliance of future sub- missions.
4.3.2. Clearance
As mentioned above Clearance applies for Standard documents (B2B) which are applicable for B2B (Business to Business) transactions and generally involves two VAT Registered Taxpayers. ZATCA׳s
e-invoicing regulations require that the Seller submit their Standard documents (B2B) for Clearance pri- or to providing the documents to the Buyer. In other words the Standard document (B2B) is only consid- ered valid if it has already been cleared by ZATCA (i.e. it includes ZATCA׳s Clearance stamp).
Standard documents (B2B) are generally submitted by the Seller; however, Standard documents (B2B) under Self-Billing are submitted by the Buyer. It is mandatory for the Seller and Buyer to be in a Self-Billing agreement which has been approved by ZATCA.
Accordingly the Clearance process involves:
-
The Seller (or Buyer in the case of Self-Billing) generates an e-invoice, credit or debit note for a transaction using its EGS
-
The Seller (or Buyer in the case of Self-Billing) submits the document to ZATCA׳s FATOORA plat- form using the Clearance API
-
The FATOORA platform validates the submitted document against ZATCA specified standards and specifications
-
Depending on the validations, the submission is either:
-
Accepted as a valid document and the FATOORA platform Stamps the document and includes/ updates the QR code as part of the API response
-
Accepted with one or more warning(s) and the Fotoora platform Stamps the documents and includes/updated the QR code as part of the API response along with list and details of the warnings
-
Rejected with one or more error(s) which is (are) listed in the API response
-
Steps 1-4 are repeated with the next submission.