The switch to ZATCA E-Invoicing in Saudi Arabia has brought many changes, but one of the most common points of confusion for businesses is knowing which type of invoice to issue: Simplified or Standard.
Choosing the wrong one isn’t just a simple mistake, it can lead to penalties and delays in getting your payments cleared.
The good news is the rule is surprisingly simple. It all comes down to who your customer is.
Standard Invoice: The Business-to-Business (B2B) Rule
A Standard Tax Invoice is used when you are selling goods or services to another registered business that has its own tax ID (VAT Registration Number).
Think of it as Business-to-Business (B2B) sales.
| Feature | Requirement | Why it Matters |
| The Customer | A VAT-registered business or entity. | They need this invoice to claim input VAT (tax) back from ZATCA. |
| Data Required | Must include the Buyer’s VAT Registration Number and name. | This information proves the recipient is a legitimate business. |
| ZATCA Clearance | Real-Time Clearance. The invoice must be sent to ZATCA for validation before you give it to your customer (or within seconds of generating it). | This ensures ZATCA validates the invoice before the customer uses it for tax purposes. |
| Format | Must be in the specific, secure XML format. | This is the secure language ZATCA uses for validation. |
Key Characteristics of a Standard Invoice
Who Issues Standard Invoices?
- A wholesaler selling products to a retail shop.
- A manufacturing company selling materials to another factory.
- A consulting firm billing another corporate client.
In Short: If you are invoicing another company, you need a Standard Invoice that is validated by ZATCA immediately.
Simplified Invoice: The Business-to-Consumer (B2C) Rule
A Simplified Tax Invoice is used when you are selling goods or services directly to an end consumer, someone who is not registered for VAT and will not be using the invoice to claim tax back.
Think of it as Business-to-Consumer (B2C) sales, which are typical in retail.
Key Characteristics of a Simplified Invoice:
| Feature | Requirement | Why it Matters |
| The Customer | An individual consumer, not a registered business. | They don’t need to claim input VAT. |
| Data Required | Must include a clear QR Code. The buyer’s name and VAT ID are not required. | The QR code holds all the necessary transaction details for ZATCA to verify the sale later. |
| ZATCA Clearance | Reporting within 24 Hours. The invoice does not need to be cleared instantly. You must report all Simplified Invoices to ZATCA within 24 hours of issuance. | This allows fast checkout times at places like supermarkets or cafes. |
| Format | Can be issued as a simplified paper receipt, but it must include a valid QR Code. | The QR code is the key compliance feature here. |
Who Issues Simplified Invoices?
- A supermarket or grocery store.
- A coffee shop or restaurant.
- A small retail shop selling clothes or electronics to an individual.
In Short: If you are giving a receipt to an individual customer, you need a Simplified Invoice with a valid QR code, which you must report within 24 hours.
The Right Tool for the Job: Your ERP
For Saudi SMEs, trying to manually manage these two different sets of rules and deadlines is a recipe for errors. This is where an integrated system like NumberOneERP becomes essential.
Your ERP should be smart enough to handle both types of compliance automatically:
- Sales to Registered Customer (B2B): The ERP detects the customer’s VAT ID, generates the Standard XML invoice, and sends it to ZATCA for real-time clearance before the document is finalized.
- Sales to Individual Customer (B2C): The ERP generates the simple receipt with a secure QR code and queues it up for automatic reporting to ZATCA within the 24-hour window.
By automating this process, your business stays compliant with the two different ZATCA timelines and data requirements, allowing your team to focus entirely on serving customers, not figuring out tax laws.
For more info, call +966 56 927 1692