What are Tax Invoices?

A tax invoice is defined as a document issued for taxable supplies, according to the requirements stipulated in the regulations.
Previously, tax invoices were manually issued or generated from any software such as Word or Excel. However, the General Authority of Zakat and Tax (GAZT) announced the approval of the Electronic Invoicing Regulation, and the obligation to issue and maintain invoices electronically starting from December 4, 2021.
We will discuss the definition of electronic tax invoices (standard) and simplified electronic invoices, and the difference between them.

1. Electronic Tax Invoice (Standard):
   • This invoice is issued from one entity to another and contains all the elements of a tax invoice, including:
   • Document title: “Tax Invoice” or “Simplified Tax Invoice.”
   • Dates: Invoice issuance date and the date of supply if different from the issuance date.
   • Serial number of the tax invoice.
   • Supplier’s details: Name, address, VAT registration number.
   • Customer’s details: Name, address, VAT registration number.
   • Details of the supply: Must be in Arabic; other languages are allowed alongside Arabic.
   • Total amount before VAT.
   • VAT rate.
   • Total amount after VAT.
2. Simplified Tax Invoice:
   • This invoice is issued for supplies subject to VAT in specific cases and contains fewer details compared to the standard tax invoice.
   • It is usually issued from an entity to an individual (non-taxable persons) and must contain a Quick Response (QR) Code.
   • Note that it has become mandatory to apply the QR Code on standard tax invoices starting from January 1, 2023, which is the second phase of electronic invoicing.

These tax invoices ensure compliance with VAT regulations and facilitate the process of taxation and financial record-keeping for businesses.