ZATCA e-invoicing for travel agencies.

An e-invoice is a tax invoice produced in a structured electronic format by an electronic solution. A paper invoice that is scanned, or an invoice typed in a word processor or spreadsheet, does not count.

The rules apply to every taxable person resident in the Kingdom, so every VAT-registered travel agency in Saudi Arabia issues its tax invoices, credit notes and debit notes electronically. Sales that are entirely exempt and supplies under the reverse charge are outside e-invoicing, and supplies that are not subject to VAT need no tax invoice at all.

Phase 1 (generation) has applied to all resident taxpayers since 4 December 2021. Invoices come from a compliant electronic solution that cannot be tampered with: no editing or deleting an issued invoice, no resetting the numbering, no changing the time.

Phase 2 (integration) connects that solution to ZATCA’s FATOORA platform. Each invoice is produced as XML (or PDF/A-3 with the XML inside), carries a unique identifier and the previous invoice’s hash, and each device that issues invoices is registered with ZATCA. Phase 2 arrives in waves. ZATCA tells each group of taxpayers at least six months before its date, by the official email and SMS registered with it; until then, Phase 1 continues.

Further waves will be announced by ZATCA. The current table is on ZATCA’s roll-out phases page.

A simplified invoice can be used for any sale to an individual who is not VAT-registered. Between businesses it is allowed only below SAR 1,000. Once cleared or reported, an invoice cannot be cancelled: a mistake is reversed with a credit note and a new invoice is issued.

A standard tax invoice carries, among other details:

• the title “Tax Invoice”, the date and time of issue, and a sequential number;
• your name, address in the Kingdom and VAT number;
• the buyer’s name, address and VAT number;
• for each line: what was supplied, the price, the quantity, any discount, the VAT rate and the VAT amount;
• the totals, with the VAT shown in riyals, and the QR code.

Arabic is required. Every invoice is issued in Arabic, alongside any other language, and the Arabic is the version that counts. Numbers, currency codes, dates and Latin-script names are accepted as they are.

Any currency, VAT in riyals. You can invoice in dollars, rupees or any currency, but the VAT amount must also appear in Saudi riyals, at the Saudi Central Bank’s rate on the day the tax is due.

Want to see what an invoice’s QR code holds? Try the free ZATCA QR reader.

Principal or agent

ZATCA’s guideline for agents says a travel agent can act either way, and the VAT depends on which (more in our guide to VAT on commission). As principal, the agency buys the travel or the room and sells it on, so VAT follows the full price of what it sells. As a disclosed agent, the contract is between the traveller and the airline or hotel, and the agency’s own supply is its separate fee or commission.

Flights

• International passenger transport (to or from a place outside the Kingdom) is zero-rated, along with directly connected charges such as accompanied luggage and seat reservations.
• Domestic passenger transport within the Kingdom carries VAT at the standard 15% when it is not part of an international journey.
• A separate fee charged as commission on a zero-rated international ticket is a service of its own, and ZATCA states that it is not subject to VAT at the zero rate.

Hotels

• Hotel stays in the Kingdom carry VAT at 15%, including for guests and companies from abroad.
• Hotels outside the Kingdom are outside the scope of Saudi VAT.

Umrah and Hajj programmes

We found no ZATCA guideline giving Umrah or Hajj programmes a VAT treatment of their own, so the general rules apply to each part. Read plainly, services that pilgrims use while in the Kingdom, such as hotels and transport, are not treated as services to someone abroad, while international flights stay zero-rated. Where a programme raises a question, ZATCA accepts requests for an interpretative decision, which is the safest way to an answer you can rely on.

No margin scheme for travel

Saudi VAT has no special margin scheme for travel. The margin scheme in the VAT rules covers eligible used goods only.

Refunds, cancellations, later discounts and corrected details are handled with an electronic credit or debit note. The note follows the type of the invoice it corrects (cleared for a standard invoice, reported for a simplified one), refers to the original invoice number, and is due by the 15th of the month after the event.

Invoices, notes and their data are kept for at least six years from the end of the tax period, in Arabic, in electronic form, within the Kingdom. Cloud storage is accepted as long as ZATCA can access the records directly. Your solution must be able to export invoices to an archive.

1. Check that every invoice comes from your system, numbered in one sequence, and is never edited after it is issued.
2. Collect buyers’ VAT numbers and addresses for company sales before you invoice.
3. Decide principal or agent for each product: tickets, hotels, packages, visas, transfers.
4. Keep the email and mobile number registered with ZATCA watched for your wave notice.
5. For Phase 2, plan the onboarding of every device that issues invoices on the FATOORA portal.

ZATCA publishes a Solution Providers Directory. In ZATCA’s own words it is an indicative list and “is not considered as an approval by ZATCA”; any solution that meets the requirements is compliant, listed or not.