# Tax Invoice vs Simplified Tax Invoice: ZATCA Rules 2026 *When to use each type, which fields are mandatory, and how to avoid a rejected invoice* > **In short:** A practical guide to tax invoices vs simplified tax invoices under ZATCA: when to use each, the mandatory fields, common rejection errors, and Phase Two. - **URL:** https://www.snad.io/en/blog/farq-fatura-daribiya-vs-mubasata-zatca - **Arabic original:** https://www.snad.io/blog/farq-fatura-daribiya-vs-mubasata-zatca - **Category:** Explainers — ZATCA & Tax - **Tags:** e-invoicing, ZATCA, value added tax, accounting, compliance, small business - **Published:** 2026-05-10 - **Updated:** 2026-08-02 - **Publisher:** Snad (snad.io) Plenty of Saudi business owners issue the same invoice format to every customer, without realising that the Zakat, Tax and Customs Authority (ZATCA) draws a sharp line between two main invoice types: the tax invoice and the simplified tax invoice. Confusing the two can get your invoices rejected by your own customers (in B2B), or expose the business to regulatory penalties during a tax audit. This guide explains the substantive difference between the two types, when each one is used, the mandatory fields in each, the impact of Phase Two of e-invoicing, the common errors the Fatoora platform rejects, and how a professional accounting system makes sure the right type is issued automatically for each kind of sale. ## What is e-invoicing in Saudi Arabia? An electronic invoice in Saudi Arabia is not simply an invoice saved as a PDF. It is a structured document that follows standards set by the Zakat, Tax and Customs Authority (ZATCA). The rollout came in two phases: - Phase One (Generation Phase): issuing invoices electronically in a structured format with a QR code, without a live link to the Authority. It began in December 2021. - Phase Two (Integration Phase): a live link to the Fatoora platform, so invoices are sent to the Authority in real time to be digitally signed before they are handed to the customer (for tax invoices), or afterwards within 24 hours (for simplified invoices). It is applied in waves based on the size of the business. Every business registered for Value Added Tax (VAT) must use an e-invoicing system that is compliant with ZATCA. Paper invoices and Excel or Word files are no longer legally acceptable. The distinction between a "tax invoice" and a "simplified tax invoice" inside this framework is what determines how the invoice is issued, which fields are mandatory, and when it is sent to the Authority. ## The tax invoice: when to use it and its mandatory fields A tax invoice is used in business-to-business (B2B) transactions, meaning the buyer is a company registered for VAT that needs to recover the tax charged to it as input VAT. Mandatory fields: - The seller's name, address and VAT number. - The buyer's name, address and VAT number (mandatory if the buyer is registered for VAT). - The sequential invoice number and the date and time of issue. - A detailed description of each line item: quantity, price, tax rate, and the tax amount per line. - The total before tax, the total tax, and the total after tax. - A QR code (mandatory in Phase Two). - The digital signature and the Authority's cryptographic stamp in Phase Two. When to use it: - On B2B sales from a certain value upwards (the thresholds change, but the norm is that any B2B transaction warrants a full tax invoice). - When selling to government entities. - On export transactions. A tax invoice is handed to the customer only after it has been sent to the Fatoora platform and digitally signed (clearance). It must not be given to the customer before the Authority has approved it. ## The simplified tax invoice: when to use it and its fields A simplified tax invoice is meant for business-to-consumer (B2C) transactions, meaning the buyer is an individual who is not registered for VAT. It is the most common type in restaurants, retail shops and at the point of sale (POS). Mandatory fields: - The seller's name and VAT number. - The date and time of issue. - A description of the line items with their prices. - The invoice total and the tax amount. - A QR code on the invoice, which is mandatory (it carries the seller's name, VAT number, date and time, invoice total, and tax amount). Fields that are not mandatory: - Buyer details (name, address, VAT number): optional, because the buyer is usually an individual who will not reclaim the tax. - A per-line tax breakdown: the total tax on the invoice is enough. When to use it: - Point-of-sale transactions with an end consumer. - Retail sales in stores. - Services to individuals, such as restaurants and salons. A simplified invoice is given to the customer immediately and sent to the Fatoora platform afterwards (within 24 hours in Phase Two) for archiving, not for prior approval. ## The key differences between the two types The differences a business owner needs to internalise: - The recipient: the tax invoice is for companies registered for VAT, the simplified invoice is for individuals and end consumers. - Buyer details: mandatory on the tax invoice, optional on the simplified one. - Per-line tax breakdown: required on the tax invoice, while the total is enough on the simplified one. - Timing of the submission to the Authority: the tax invoice is sent before delivery and waits for the Authority's approval (clearance); the simplified invoice is sent after delivery, within 24 hours (reporting). - The digital signature: on the tax invoice it comes from the Authority; on the simplified invoice the system signs locally and then uploads to the Authority. - Tax recovery: the buyer can recover input VAT from a tax invoice, not from a simplified one (unless the buyer is an individual who was never going to reclaim it anyway). Mixing the two types creates problems. Issuing a simplified invoice to a B2B customer denies that customer the right to reclaim the tax, while issuing a full tax invoice for every sale at the point of sale slows the process down and puts an unnecessary load on inventory and accounting. ## How Phase Two handles each type Phase Two was rolled out to businesses in stages according to their revenue, and it imposed a live link to the Fatoora platform: - For the tax invoice (B2B), the model applied is the clearance model. The invoice is sent to the Authority, the system waits for the Authority's response (a digital signature plus an approval code), and only then is the invoice handed to the customer. It may not be delivered before approval. That means any outage in the connection to the Authority halts sales. - For the simplified invoice (B2C), the model is the reporting model. The invoice is handed to the customer immediately with a QR code and a local digital signature, then sent to the Authority within 24 hours to be recorded. This keeps checkout fast at the point of sale. The split is sensible, but it requires a system that can tell the two types apart and apply the right logic to each. Legacy systems, and Excel, cannot do that, which is why adopting an e-invoicing system approved by the Authority became a condition for staying in operation. The official Fatoora platform publishes a list of approved solution providers, and a business owner is advised to confirm that their system is approved before relying on it for day-to-day operations. ## Credit notes and debit notes: when are they issued? The credit note and the debit note are part of the e-invoicing framework, and they carry the same requirements as invoices in terms of type (tax and simplified): - A credit note is issued to reduce the value of an earlier invoice (returns, a price reduction after the sale, a partial cancellation). It lowers revenue and output VAT. - A debit note is issued to increase the value of an earlier invoice (an added line item, a price correction upwards, fees that were never charged). It raises revenue and output VAT. Every note must reference the original invoice number, the reason, and the adjusted amount. It follows the same route as the original invoice: if the original was a tax invoice, the note is a tax note subject to clearance; if the original was simplified, the note is simplified and subject to reporting. Issuing the right note protects the business from carrying an invoice in its records that was never collected, or collected only in part. That is common in wholesale trade and in services, where returns and price adjustments happen constantly. ## Common errors the Fatoora platform rejects The errors that most often cause invoices to be rejected on the Fatoora platform: - A wrong or unregistered VAT number (one that does not start with 3 or is not 15 digits long). - A gap between the calculated tax amount and the tax amount displayed (the result of manual rounding). - An invoice date in the future, or too far in the past (more than 7 days). - A duplicate sequential invoice number. - An incorrect tax rate (it must be 15% except in specific cases such as zero-rated or exempt supplies). - A currency mismatch (it must be SAR in most cases). - Missing buyer details on a tax invoice (B2B). - A digital signature that does not match the certificate registered in the system. A professional accounting system catches these errors before submission and blocks any invoice that fails the basic quality check. That cuts down both invoice rejections and rework. ## How Snad picks the invoice type automatically Snad is built to work with the ZATCA framework end to end, and it picks the invoice type automatically from the customer's data: - If the customer profile holds a registered VAT number, a full tax invoice is generated with every mandatory field and sent to the Fatoora platform under the clearance model. - If the customer is an ordinary individual (at the point of sale, or in e-commerce with no VAT number), a simplified tax invoice is generated under the reporting model, handed to the customer immediately and uploaded to the Authority afterwards. - Returns are handled automatically through a credit note linked to the original invoice, and revenue and inventory are updated at the same time. - If the link to the Fatoora platform drops temporarily, the system holds simplified invoices in a secure queue for resubmission inside the 24-hour window, and applies deferred clearance logic to tax invoices in line with the Authority's rules. - Quarterly tax reports are generated automatically, with figures that match what was filed on the Fatoora platform, so there is no discrepancy to fear when you submit the return. With that in place, the owner of a small business does not need to be an expert in the fine detail of e-invoicing. The system manages the complexity, and the owner stays focused on the actual business: growing sales and managing inventory. ## Frequently asked questions ### Can I use a tax invoice for every customer, including individuals? Technically yes, but it is not practical at the point of sale because it slows operations down. And for individuals, the extra data on a tax invoice serves no purpose. The better approach is a simplified invoice in B2C and a tax invoice in B2B. ### What do I do if I find an error on an invoice after sending it to the customer? Do not amend the original invoice. Issue a credit note or a debit note linked to that invoice to correct the financial difference, and send it to the Fatoora platform under the same rules as invoices. That preserves a sound audit trail. ### Is a simplified invoice valid for exports? No. Exports usually require a full tax invoice, because they involve formal commercial transactions with parties outside the Kingdom and may have to be presented to customs. The tax rate may also be zero, which needs clear documentation. ### Can a customer ask for a full tax invoice after a simplified invoice has been issued? Yes. A customer registered for VAT has the right to request a tax invoice. The usual practice is to issue a new full invoice and cancel the simplified one with a credit note, documenting the correction in the system. ### Does Snad prevent the issuing of an invoice with errors that the Authority might reject? Yes. The system checks the customer's VAT number, calculates the tax precisely without manual rounding, verifies the invoice sequence, and refuses to issue any invoice until the errors are fixed. That sharply reduces the chance of the Fatoora platform rejecting a document. --- ## About the publisher **Snad (سند)** — a private Saudi software company based in Riyadh, founded 2025. Legal form: Sole proprietorship. Commercial registration: 7038154642 VAT number: 310959226500003 Only official domain: snad.io > Snad is a private commercial business-management platform. It is not a > government body, not a bank, and not a government services portal, and it > is not affiliated with any government entity. Any site or app with a > similar name is unrelated to Snad.