Global E-Invoicing & CTC Models
E-Invoicing
By using an integrated electronic solution, electronic invoicing intends to replace the issuance of paper invoices and notes with an electronic process that enables the interchange and processing of invoices, credit notes, and debit notes in a structured electronic format between the buyer and supplier.
What is an Electronic Invoice?
A tax invoice that is produced electronically and has a standardised electronic format. A paper invoice that has been copied, scanned, or otherwise transformed into an electronic file is not regarded as an electronic invoice.
Saudi Arabia
In Kingdom, Electronic Invoicing will be implemented in two stages. Electronic invoice issuance will be very similar to what it is today for the first phase, which is effective as of December 4th, 2021, for all taxpayers (excluding non-resident taxpayers) and any other parties issuing tax invoices on behalf of suppliers subject to VAT. Invoices will be issued through a compliant electronic solution and include additional fields depending on the type of transaction.
What is [Standard] Tax Invoice?
An invoice that contains all tax invoice components and is typically issued by Business to Business(B2B).
What is Simplified Tax Invoice?
An invoice that often comes from a business-to-consumer (B2C) and includes all the components of a simplified tax invoice.
How Fatoorah works?
In KSA, e-invoicing will be implemented in two phases:
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PHASE 1 (as of December 4th, 2021): Taxpayers will be required to produce and save tax invoices and notes using electronic solutions that complies with Phase 1 standards during Phase 1, also known as the Generation phase. As of December 4, 2021, all taxpayers (other than non-resident taxpayers) and any other parties generating tax Consign on behalf of suppliers subject to VAT are subject to the provisions of Phase 1.
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PHASE 2 (starting from January 1st, 2023): The targeted taxpayer group will introduce Phase 2 technical and business needs for electronic invoicing and electronic solutions, and these requirements will be integrated with ZATCA's systems in Phase 2, also known as the Integration phase. ZATCA will give taxpayers at least six months' notice before the start of their Phase 2 wave, and the first target group's compliance date is from January 1st, 2023 onwards.
Legislations and Resolutions
- E-Invoicing Bylaw:
- The Controls, Requirements, Technical Specifications, and Procedural Rules for implementing the provisions of the E-Invoicing Regulation (24 June 2022):
Detailed Guidelines
- Guidelines for E-Invoicing:
- Detailed Guidelines for E-Invoicing:
- Detailed Technical Guidelines for E-Invoicing:
Developer Resources
- E-Invoice Data Dictionary:
- E-invoice XML Implementation Standard:
- Security Features Implementation Standard:
Portals from ZATCA
- Developer Portal:
- Fatoorah Simulation Portal:
- Fatoora Developer Community (Invite Required):
Germany
What is XRechnung?
XRechnung is the standard e-invoice format in Germany for electronic invoicing in the public sector, developed to comply with European Union directives for e-invoicing in public procurement (Directive 2014/55/EU). It is based on the UBL (Universal Business Language) and CII (Cross Industry Invoice) standards, ensuring it can be processed efficiently by both public authorities and businesses. As of 2025, Germany plans to expand the usage of XRechnung for B2B transactions, making it a primary format for domestic invoicing across various sectors.
Technical Specifications of XRechnung
XML-Based Format: XRechnung is an XML-based format designed for automatic data exchange and processing. This allows seamless integration with business systems like ERP platforms and accounting software. Compatibility with EU Standards: XRechnung is fully compatible with the EU's e-invoicing standards, ensuring that it can be used across Europe, particularly in the public procurement sector. It supports data validation and automated processing by public authorities. Mandatory Fields: XRechnung includes key fields such as invoice number, invoice date, buyer and seller information, line item details, and tax rates. This ensures that all invoicing information is structured correctly for processing by authorities and the recipient. Cross-Industry Compatibility: The format is designed for various industries, making it versatile for use in diverse public and private sector transactions.
XRechnung and the 2025 Mandate
Starting January 2025, the German government will gradually require all businesses to issue invoices electronically using XRechnung or an equivalent format that complies with the EU's e-invoicing directive. Initially, this applies to domestic B2B transactions and will cover a broad range of business sectors in the coming years. Public Sector Transactions: The use of XRechnung for public sector transactions is mandatory, but this will extend to B2B invoices under the new e-invoicing framework. Transitional Period: Hybrid formats, such as PDF invoices with embedded XML data (known as hybrid XRechnung), are allowed during the initial phase to facilitate the transition.
Other Formats in the German E-Invoicing Ecosystem
ZUGFeRD: Alongside XRechnung, ZUGFeRD (Zentraler User Guide des Forums elektronische Rechnung Deutschland) is another format used in Germany for e-invoices, particularly for smaller businesses and those not involved in public procurement. ZUGFeRD is a hybrid format that includes both a machine-readable XML file and a human-readable PDF. It offers greater flexibility for companies transitioning to full electronic invoicing. PEPPOL: Germany is also aligned with the PEPPOL (Pan-European Public Procurement On-Line) standard, which enables cross-border electronic invoicing within the EU. This standard facilitates the exchange of electronic invoices between companies and public authorities across EU member states.
Integration and Adoption
ERP Integration: Businesses will need to integrate their invoicing systems with compatible ERP systems or adopt third-party e-invoicing solutions that can generate invoices in the required XRechnung or ZUGFeRD format. Invoice Validation: The German government requires that e-invoices be validated using a specific online validation service to ensure compliance. This service checks whether the invoice meets the required technical standards and whether it can be automatically processed by the recipient.
Why XRechnung and E-Invoicing?
Improved Tax Compliance: By mandating e-invoicing, Germany aims to reduce tax evasion and increase the accuracy of VAT reporting. Electronic invoices can be tracked more easily, reducing the chances of fraud. Efficiency and Automation: The structured format of XRechnung allows for automated processing, reducing manual entry errors and administrative overhead. Cross-Border Compatibility: The use of EU-compliant standards like XRechnung ensures that businesses can easily exchange invoices across European borders, facilitating international trade. For further technical specifications and updates, refer to official documents from the Federal Ministry of Finance (BMF) or consult resources from organizations like ZUGFeRD and PEPPOL.