Sweden’s Pagero in talks with Saudi Arabia for mandatory electronic invoicing

A high-level delegation of executives from Saudi Arabian Tax Authority last month conducted a visit to the Hungarian tax administration in Budapest to learn more about implementing Continuous Transaction Controls (CTC) such as mandatory electronic invoicing.

“The goal is not only for economic actors to pay the state the value-added tax (VAT) introduced in 2018, but equally for the Saudi tax authority to help taxpayers with digital services which make the fulfilment of tax payment obligations as easy and convenient as possible,” Suhail Abanmi, head of the Saudi tax authority, said during the visit.

Sweden-headquartered Pagero has been providing global e-invoicing services including local compliance in over 65 countries across the continents. Currently the firm is in talks with officials in Saudi Arabia to assist more with e-invoicing provide clarity in the system around transactions.

In an interview with Argaam, Pagero’s Middle East and Africa (MEA) managing director, Luis Ortega, talked about how Saudi Arabia is pushing more towards digitization and a regional compliance around transactions.

Here’s the full interview:

Q: Could you elaborate more on how will digitization ssist Saudi Arabia in implementing a robust electronic invoicing system?

A: To further bridge the VAT gap, Hungary, in July 2018, turned its attention to supervising the VAT of sales invoices, by introducing business-to-business transaction level reporting, real time invoice data reporting (RTIR), which means that Hungarian businesses are required to report sales invoice data within their thresholds.

The visit by the Saudi delegation to Budapest highlights how the Kingdom is interested in implementing CTC, such as mandatory RTIR, to help bridge gaps in VAT and help their businesses manage this better.

Read: Lower VAT threshold to increase taxpayer base in Saudi: KPMG

Q: How far have the talks progressed? Do we expect to see any announcements soon?

A: We are unable to comment on what the Saudi government is doing or how the talks of implementation is going, but it is safe to say that the digitization process in line with Vision 2030 is real and there is a growing need for better methods to manage these transactions. So, I am sure we will see interesting announcements around this soon.

Q: How important is e-invoicing and what kind of presence have you seen for it in the region?

A: In the GCC, we are definitely seeing a push towards digitization and hence more clarity in the system around transactions. This means that there is a need for not just regional compliance but global one as well.

We help standardize and smoothen the e-invoicing process between businesses, institutions and across borders. This gives us a broader understanding of the market but also to make it easier for our customer to connect with their business partners.

Q: What plans does Pagero have in 2019 for Saudi Arabia and the region as a whole?

A: Pagero established in the GCC a while ago in anticipation of the demand to make sure that we have the right technologies and skillset base in region. We have seen a growing interest for our services driven by regulatory changes in the region.

As the operation grows, we have established in 2019 strong partnerships with other service providers that complement and strengthen our offering. Our goal for this year is to keep on growing the network globally.

We will keep on working closely with governments, tax authorities and partners to be always ahead of the ever-changing regulations to make sure we can assist our customers to stay compliant.

Write to Paromita Dey at paromita.d@argaamplus.com