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A Commercial Invoice Tax Invoice is a dual-purpose document that combines traditional commercial invoicing with Saudi Arabia's mandatory tax invoice requirements. Under the Value Added Tax Law and ZATCA's e-invoicing regulations, you must issue this document for all taxable transactions, whether selling goods or services to businesses or consumers. The document serves as legal proof of the transaction while ensuring compliance with Saudi Arabia's digital tax infrastructure.

When do you need this document?

You need to issue a Commercial Invoice Tax Invoice for every taxable supply of goods or services in Saudi Arabia where VAT applies. This includes all business-to-business transactions, retail sales above the de minimis threshold, and cross-border transactions involving Saudi entities. The document is required within 15 days of supplying goods or services, or at the time of payment if received earlier. You must also issue simplified tax invoices for B2C transactions under SAR 1,000, while detailed tax invoices are mandatory for higher-value transactions and all B2B sales.

Key legal considerations

Your Commercial Invoice Tax Invoice must include mandatory fields specified by ZATCA regulations, including a unique sequential invoice number, your VAT registration number, complete seller and buyer details, and itemized descriptions with applicable VAT rates. The document must feature a QR code containing specific data elements for verification purposes. You're required to maintain invoices in both Arabic and English for international transactions, and ensure all calculations comply with approved VAT rates of 5%, 15%, or zero-rating as applicable. The invoice must clearly separate the pre-tax amount, VAT amount, and total amount due. Electronic invoices must follow the prescribed XML format and be transmitted through ZATCA's approved e-invoicing platform.

Legal requirements in Saudi Arabia

Under the E-Invoicing Regulation (Fatoorah), you must generate and store invoices electronically from December 4, 2021. Phase 1 requires electronic generation and storage, while Phase 2 mandates real-time integration with ZATCA systems for qualifying taxpayers. Your invoices must comply with UBL 2.1 or UN/CEFACT standards and include cryptographic stamps for authentication. You're required to retain invoice records for at least six years and provide them in electronic format during tax audits. Non-compliance can result in penalties ranging from SAR 1,000 to SAR 50,000 per violation, with potential business license suspension for repeated violations. The Commercial Documents Law also requires proper authorization and signature procedures for invoice issuance.