Generate and submit simplified electronic invoices for Saudi Arabia

This article provides an overview of the functionality for simplified electronic invoices (e-invoices) that are available for Saudi Arabia in Microsoft Dynamics 365 Commerce. This article also provides guidelines for setting up the functionality.

The electronic invoicing functionality that's available for Saudi Arabia in Commerce provides the following capabilities:

• Generate an XML file of a simplified e-invoice when a sales transaction is concluded in Commerce point of sale (POS).
• Generate a cryptographic stamp, or a digital signature, for the simplified e-invoice.
• Generate and print a QR code for the simplified e-invoice that includes the cryptographic stamp.
• Submit the simplified e-invoice from Commerce headquarters to Saudi Arabian tax authorities (Zakat, Tax and Customs Authority [ZATCA]) for reporting purposes.

For more information about the electronic invoicing requirements for Saudi Arabia, see the E-Invoicing portal by ZATCA.

The high-level, end-to-end process flow in Commerce for Saudi Arabia is as follows:

1. When the checkout process is completed for a sales transaction in POS, POS uses Commerce Scale Unit (CSU) to send the Commerce runtime (CRT) a request to generate and digitally sign a simplified e-invoice. The Fiscal registration framework and an internal connector are used to implement the generation and digital signing of simplified e-invoices.

   Note

   If POS is in offline mode, the generation and digital signing of an e-invoice occur in the local copy of CRT on the POS machine.

2. CRT generates a simplified e-invoice in an XML format. Electronic reporting (ER) is used to implement the XML format of e-invoices for Saudi Arabia. A common format is used for simplified e-invoices in Commerce and regular tax e-invoices in Dynamics 365 Finance.

3. CRT sends Commerce headquarters a request to provide a digital certificate.

4. Commerce headquarters extracts the digital certificate from Azure Key Vault and sends it back to CRT. For more information about how Commerce handles digital certificates, see the Configure the digital signature parameters section of this article.

   Note

   If POS is in offline mode, the local copy of CRT uses a digital certificate that's locally installed on the POS machine.

5. CRT calculates the invoice hash, digitally signs the e-invoice data, and generates a QR code that includes the invoice hash and digital signature data. CRT also updates the XML invoice with the invoice hash and digital signature data. The e-invoice, the invoice hash, the QR code, and other information are saved in the channel database in a fiscal transaction that's linked to the sales transaction.

6. POS requests a sales receipt from CRT. CRT builds the receipt, including the QR code, and sends it back to POS. POS sends the receipt to the receipt printer.

7. Commerce headquarters uses Commerce Data Exchange (CDX) to download the sales transaction data together with fiscal transactions from CSU. The data is stored in the headquarters database throughout the life of your production environment.

8. Commerce headquarters extracts the simplified e-invoice in the XML format from the fiscal transaction that's linked to the sales transaction. It then submits the e-invoice to ZATCA. The submission is done by integrating with the Electronic Invoicing service. For more information about the common electronic invoicing capabilities that are available to Saudi Arabia, see Customer electronic invoices in Saudi Arabia.

Set up Commerce for Saudi Arabia

This section describes the Commerce settings that are specific to and recommended for Saudi Arabia. For more information about common Commerce features and settings, see Commerce home page.

As a prerequisite, you should complete the setup of the electronic invoicing functionality for Saudi Arabia, including the configuration of the Electronic invoicing service. For more information, see Customer electronic invoices in Saudi Arabia.

To use the Commerce functionality that is specific to Saudi Arabia, you must complete the following tasks:

• Set the Country/region field to SAU (Saudi Arabia) in the primary address of the legal entity.
• Set the ISO code field to SA (Saudi Arabia) in the POS functionality profile of every store that's located in Saudi Arabia.

You must also specify the following settings for Saudi Arabia. Note that you must run appropriate distribution jobs after you complete the setup.

1. Enable Commerce features for Saudi Arabia in the Feature management workspace.
2. Set up value-added tax (VAT) per the Saudi Arabian VAT regulations.
3. Configure custom fields and receipt formats to print QR codes on receipts and comply with the local regulatory requirements.
4. Configure the fiscal registration functionality for Saudi Arabia to enable the generation and digital signing of simplified e-invoices.
5. Configure digital certificates and other parameters of digital signing for the Commerce channel side.
6. Specify the ER configurations that should be used to generate simplified e-invoices in POS and submit them from Commerce headquarters.
7. Configure e-invoice submission for simplified e-invoices that are generated in POS.
8. Enable the digital signature in offline mode.

Enable features for Saudi Arabia

Enable the following features in the Feature management workspace:

• KSA Electronic-Invoicing capability for the fiscal integration framework
• (Saudi Arabia) Electronic invoicing integration

Set up VAT per Saudi Arabian requirements

You must create sales tax codes, sales tax groups, and item sales tax groups. You must also set up sales tax information for products and services. For more information about how to set up and use sales tax, see Sales tax overview and Configure sales tax codes.

You must also specify sales tax groups and enable the Prices include sales tax option for stores that are located in Saudi Arabia.

Configure custom fields to use in receipt formats for sales receipts

You can configure the language text and custom fields that are used in the POS receipt formats. The default company of the user who creates the receipt setup should be the same legal entity where the language text setup is created. Alternatively, the same language texts should be created in both the user's default company and the legal entity of the store that the setup is created for.

On the Language text page, on the POS tab, add the following records for the labels of the custom fields for receipt layouts. Note that the Language ID, Text ID, and Text values that are shown in the table are just examples. You can change them to meet your requirements. However, the Text ID values that you use must be unique, and they must be equal to or higher than 900001.

On the Custom fields page, add the following records for the custom fields for receipt layouts. Note that Caption text ID values must correspond to the Text ID values that you specified on the Language text page.

On the Commerce parameters page, on the Configuration parameters tab, add the following records.

Configure receipt formats

For every required receipt format, change the value of the Print behavior field to Always print. You must also configure hardware profiles to support receipt printers and to enable Hardware station. For more information about how to work with POS peripherals, see Peripherals.

In the Receipt format designer, add the following custom fields to the appropriate receipt sections. Field names correspond to the language texts that you defined in the previous section.

• Footer: Add the following field:

  • QR Code – This field prints the QR code for the receipt.

For more information about how to work with receipt formats, see Set up and design receipt formats.

Set up fiscal registration

Complete the fiscal registration setup steps that are described in Set up the fiscal integration for Commerce channels:

1. Set up a fiscal registration process. Be sure to note the settings of the fiscal registration process that are specific to Saudi Arabia.
2. Set error handling settings.
3. Enable manual execution of deferred fiscal registration.

Configure the fiscal registration process

To enable the fiscal registration process for Saudi Arabia in Commerce headquarters, follow these steps.

1. Download configuration files for the fiscal document provider and the fiscal connector from the Commerce software development kit (SDK):

   1. Open the Dynamics 365 Commerce Solutions repository.
   2. Open the last available release branch.
   3. Open src > FiscalIntegration > ElectronicInvoiceSaudiArabia.
   4. Download the configuration file for the fiscal connector, ConnectorSample.xml.
   5. Download the configuration file for the fiscal document provider, DocumentProviderSample.xml.

2. Go to Retail and Commerce > Headquarters setup > Parameters > Shared parameters. On the General tab, set the Enable fiscal integration option to Yes.

3. Go to Retail and Commerce > Channel setup > Fiscal integration > Fiscal connectors, and load the fiscal connector configuration file that you downloaded earlier.

4. Go to Retail and Commerce > Channel setup > Fiscal integration > Fiscal document providers, and load the fiscal document provider configuration file that you downloaded earlier.

5. Go to Retail and Commerce > Channel setup > Fiscal integration > Connector functional profiles. Create a new connector functional profile, and select the document provider and the connector that you loaded earlier. Then update the data mapping settings as required.

6. Go to Retail and Commerce > Channel setup > Fiscal integration > Connector technical profiles. Create a new connector technical profile, and select the connector that you loaded earlier. Set the connector type to Internal, and update the other connection settings as required.

7. Go to Retail and Commerce > Channel setup > Fiscal integration > Fiscal connector groups, and create a new fiscal connector group for the connector functional profile that you created earlier.

8. Go to Retail and Commerce > Channel setup > Fiscal integration > Fiscal registration processes. Create a new fiscal registration process, create a fiscal registration process step, and then select the fiscal connector group that you created earlier.

9. Go to Retail and Commerce > Channel setup > POS setup > POS profiles > Functionality profiles, and select a functionality profile that's linked to the store where the registration process should be activated. On the Fiscal registration process FastTab, select the fiscal registration process that you created earlier. On the Fiscal services FastTab, select the connector technical profile that you created earlier.

10. Go to Retail and Commerce > Retail and Commerce IT > Distribution schedule. Open the distribution schedule, and select jobs 1070 and 1090 to transfer data to the channel database.

Configure the digital signature parameters

To digitally sign and submit simplified e-invoices, you must obtain so-called Cryptographic Stamp Identifiers (CSIDs) from ZATCA. CSIDs are in the form of digital certificates. For more information about how to obtain CSIDs, see Electronic invoicing onboarding in Saudi Arabia. You must obtain a CSID for each POS register that you will use, because sequential numbering and digital signing of simplified e-invoices are done per POS register.

The digital certificates that will be used to digitally sign simplified e-invoices are stored in Key Vault. For the offline mode of the Store Commerce app, signing can also be done by using a digital certificate that's stored in the local storage of the machine that the Store Commerce app is installed on. The User-defined certificate profiles for retail stores feature enables configuration of certificates that are stored in Key Vault. It also supports failover to offline mode when Key Vault or Commerce headquarters isn't available. This feature extends the Manage secrets for retail channels feature.

To configure certificates and certificate profiles that can be used for digital signing, follow the steps in Set up certificate profiles. You must configure a separate certificate profile for each CSID that you obtain from ZATCA.

After you configure certificate profiles, follow these steps.

1. Go to Retail and Commerce > Channel setup > Fiscal integration > Connector technical profiles, and select the connector technical profile that you created earlier.
2. To configure certificate profiles per POS register, select Override, and create records for all registers that you must specify CSIDs for.
3. In each record, on the Device FastTab, in the Certificate profile field, specify a corresponding certificate profile. For more information about how to override connector technical profile settings, see Create connector technical profiles.

Specify ER configurations

You must download the latest versions of the following configurations from the Dataverse repository. For more information, see Import Electronic reporting (ER) configurations from Dataverse.

• E-invoice generation configurations:

  • Invoice model data model
  • Invoice model mapping for commerce (SA) data model mapping
  • Sales e-invoice (SA) format

• E-invoice submission configurations:

  • Customer invoice context model data model
  • Retail channel data data model
  • Retail fiscal document mapping data model mapping
  • Retail fiscal document format format

You must also configure legal entity–specific parameters of the e-invoice format.

1. In the Electronic reporting workspace, select Reporting configurations.

2. On the Configurations page, select the Sales e-invoice (SA) format that you imported earlier, and then select Configurations > Application specific parameters > Setup.

3. On the Application specific parameters page, select the version of the format configuration that you want to configure the parameters for.

4. On the Lookups FastTab, select the record for the PaymentMethodSubstitutionLookup lookup.

5. On the Conditions FastTab, create records to link methods of payment that are configured for customers in the Accounts receivable module to payment means that ZATCA defines for e-invoices.

6. In the Lookup result field, select a payment means code.

7. In the Name field, select a customer payment method that must correspond to the payment means code. If you want the payment means code to be selected when the customer payment method isn't specified, you can select *Blank*. If you want the payment means code to be selected for any customer payment method, you can select *Not blank*.

   The Line field is automatically set. It defines the order in which payment means codes are searched for a customer payment method. You can change the order by using the Move up and Move down buttons.

8. Complete the configuration by setting the State field to Completed.

Configure e-invoice submission

Before you set up e-invoice submission parameters for Commerce, configure the Electronic invoicing service so that it can be used for Saudi Arabia. For more information, see Get started with Electronic invoicing for Saudi Arabia. To support the configuration of CSIDs per POS register, follow these steps for each POS register in your Electronic Invoicing environment.

1. Add a corresponding CSID certificate to the Key Vault parameters of the environment.

2. Create a feature setup of the Processing pipeline type for the electronic invoicing feature. To complete this step, configure the first feature setup, and then create new feature setups by copying them from the first one and modifying the parameters.

3. In the feature setup, follow these steps:

   1. In the integration action of the processing pipeline, specify the name of the CSID certificate that you added earlier.
   2. In the applicability rule, specify the corresponding Store and RegisterNumber values.

In Commerce headquarters, follow these steps to set up e-invoice submission parameters that are specific to Commerce for Saudi Arabia.

1. On the Electronic document parameters page, on the Electronic document tab, create a new record, and specify the following parameters:

   1. In the Table name field, select Fiscal transaction document.
   2. In the Document context field, select Retail fiscal document context.
   3. In the Electronic document model mapping field, select Retail fiscal document mapping.
   4. Select number sequences for submitted file names and batch submission IDs.

2. On the Features tab, mark the Saudi Arabia electronic invoice feature as Enabled.

Enable the digital signature in offline mode

To enable the digital signature in offline mode, you must follow these steps after you activate POS on a new device.

1. Sign in to POS.
2. On the Database connection status page, ensure that the offline database is fully synchronized. When the value of the Pending downloads field is 0 (zero), the database is fully synchronized.
3. Sign out of POS.
4. Wait for the offline database to be fully synchronized.
5. Sign in to POS.
6. On the Database connection status page, ensure that the offline database is fully synchronized. When the value of the Pending transactions in offline database field is 0 (zero), the database is fully synchronized.
7. Restart POS.

E-invoice submission

To initiate submission of simplified e-invoices to ZATCA, run the Submit electronic documents periodic operation in Commerce headquarters.

You can review the submission log on the Electronic document submission log page.