( Guide · Custom software · Saudi Arabia )
ZATCA e-invoicing Phase 2 in Saudi Arabia: Wave 25, deadlines and what your software must do
By OGB Labs · Published
The two phases and the waves
ZATCA, the Zakat, Tax and Customs Authority, describes the roll-out phases on its site. Phase 1, the generation phase, has applied to all resident VAT-registered taxpayers since 4 December 2021: invoices and credit and debit notes must be generated and stored by a compliant electronic solution, not handwritten or typed in a word processor. Phase 2, the integration phase, adds technical requirements and connects the solution to ZATCA. It has applied since 1 January 2023 in waves, each defined by a revenue threshold, starting with the largest taxpayers and moving down.
Each wave has lowered the threshold. ZATCA's Wave 25 announcement of 24 July 2026 targets taxpayers whose VAT-subject revenue exceeded SAR 187,500 in any of 2022, 2023, 2024 or 2025, half the SAR 375,000 threshold of the wave before it. Check the current wave table on ZATCA's site and the notice in your own account: your notified date is the one that counts.
| Stage | Who | Date |
|---|---|---|
| Phase 1: generation | All resident VAT-registered taxpayers | From 4 December 2021 |
| Phase 2: integration, first wave | Largest taxpayers by revenue | From 1 January 2023 |
| Later waves | Lower revenue thresholds, wave by wave | 2023 to 2026 |
| Wave 25 announced | VAT-subject revenue above SAR 187,500 in 2022, 2023, 2024 or 2025 | 24 July 2026 |
| Wave 25 deadline | Integrated with Fatoora | No later than 1 February 2027 |
Am I in Wave 25?
- Look at your VAT-subject revenue for each year from 2022 to 2025. If any single year was above SAR 187,500, you are in the target group, even if revenue has since fallen.
- Watch for ZATCA's notification. ZATCA says it notifies targeted taxpayers at least six months before their integration date. Log in to your ZATCA account and check the registered email; your adviser should see it too.
- If you were in an earlier wave and missed it, you are not off the hook: the obligation stands from your notified date. Talk to your tax adviser about where you stand.
- Phase 1 already applies to you if you are VAT-registered. If you still issue invoices from Excel or a template, fix that first. Not registered yet? Check the thresholds in our guide to Saudi VAT registration for online sellers.
What Phase 2 changes in your invoicing system
Phase 2 is a software project, not a form. ZATCA publishes the detailed technical guidelines, the XML implementation standard and a software development kit on its e-invoicing pages. In summary, your system must:
- Produce each invoice as structured XML in ZATCA's format (based on UBL 2.1), alongside the readable PDF or printout the customer sees.
- Be onboarded: each invoicing unit, such as an ERP instance, a store backend or a point-of-sale terminal, is registered through the Fatoora portal with a one-time code and receives a cryptographic stamp identifier (a certificate) for signing.
- Stamp and chain invoices: each invoice carries a unique identifier, a hash, the previous invoice's hash and a cryptographic stamp, so invoices cannot be altered or deleted unnoticed.
- Print a QR code on every invoice, with the fields ZATCA specifies.
- Send standard tax invoices (business to business) to Fatoora for clearance and share them with the buyer only after they are cleared.
- Report simplified tax invoices (business to consumer, such as ecommerce and retail receipts) to Fatoora within 24 hours of issuing them.
- Handle credit and debit notes, rejections and retries, and keep a record of every submission and response.
Standard vs simplified invoices
| Criteria | Standard tax invoice | Simplified tax invoice |
|---|---|---|
| Typical use | Business to business, business to government | Business to consumer: shops, ecommerce, restaurants |
| Flow | Clearance: sent to Fatoora and validated before issue | Reporting: issued to the customer, then sent to Fatoora |
| Timing | Before the invoice is shared with the buyer | Within 24 hours of issue |
| Stamp | ZATCA's stamp added on clearance | Your own cryptographic stamp |
| Where it hurts | A Fatoora outage or rejection blocks the invoice | A store or POS that is offline must catch up within 24 hours |
Where websites, stores and ERPs need work
| System | Usual route | What to check |
|---|---|---|
| Shopify or another hosted store | An app or middleware that issues ZATCA invoices from orders | Arabic invoice fields, VAT number capture for B2B buyers, refunds as credit notes |
| WooCommerce or custom ecommerce | A Fatoora integration in the backend, or a certified provider's API | Reporting within 24 hours, retries, one onboarded unit per environment |
| Odoo, SAP Business One, Dynamics, Zoho | The vendor's Saudi localisation or a partner module | Version supports Phase 2, onboarding done per company and branch |
| Point of sale | Vendor update or replacement | Offline mode, QR printing, per-terminal onboarding |
| In-house or legacy system | Build the integration or route invoices through a provider | XML mapping, signing, hash chain, monitoring |
| Subscription and SaaS billing | Integration from the billing platform | Recurring invoices, prorations and refunds in the right type |
A readiness plan for the six months you are given
Confirm your status and date with your tax adviser and in your ZATCA account.
List every system that issues invoices or notes: ERP, stores, POS terminals, billing tools, manual processes. Each one needs a route.
Choose the route per system
Vendor update, certified e-invoicing provider, or a custom integration.
Clean the master data
Your VAT number and address, buyers' VAT numbers for B2B, product tax codes and Arabic names.
Onboard in the simulation environment first and run ZATCA's compliance checks with each invoice type: standard, simplified, credit and debit notes.
Test the failure paths
Fatoora unavailable, a rejected invoice, a terminal offline overnight.
Onboard production units, go live before the deadline, and monitor submissions daily for the first weeks.
Train the finance and store teams on corrections: an issued invoice is fixed with a credit or debit note, never edited.
Saudi Fatoora and Oman's Fawtara compared
Companies trading in both countries meet two different designs. Saudi Arabia connects each taxpayer's system to ZATCA's platform for clearance and reporting. Oman's Fawtara, which becomes mandatory for VAT-registered businesses in 2027, routes invoices through accredited service providers. A group with an ERP serving both countries needs two outputs from one invoice record. Our guide to e-invoicing in Oman (Fawtara) covers the Omani side, and ERP vs custom software in Oman helps decide what to keep in the ERP and what to build around it. For the UAE, which uses Peppol and accredited service providers, see UAE e-invoicing.
How OGB Labs helps
Our Riyadh team connects stores, ERPs, point-of-sale and in-house systems to Fatoora: mapping invoice data to ZATCA's XML, onboarding each unit, signing and QR, clearance and reporting with retries, and a dashboard that shows every submission and rejection. We work alongside your tax adviser, who owns the tax decisions. See our work in Saudi Arabia and our custom software service, or message us on WhatsApp at +968 7111 0727.
( FAQ )
Questions people ask.
What is ZATCA Wave 25?
The 25th group of taxpayers required to integrate with ZATCA's Fatoora platform. ZATCA announced it on 24 July 2026 for taxpayers whose VAT-subject revenue exceeded SAR 187,500 in 2022, 2023, 2024 or 2025, with integration by no later than 1 February 2027.
How do I know if my business is in a ZATCA wave?
ZATCA notifies targeted taxpayers at least six months before their integration date. Check your ZATCA account and registered email, and compare your VAT-subject revenue for each reference year with the wave threshold.
What is the difference between Phase 1 and Phase 2?
Phase 1, since 4 December 2021, requires invoices to be generated and stored by a compliant electronic system. Phase 2 adds XML, cryptographic stamps and QR codes, and connects the system to ZATCA's Fatoora platform for clearance and reporting.
How fast must simplified invoices be reported?
Within 24 hours of issue. Standard (B2B) invoices must be cleared by Fatoora before they are shared with the buyer.
Does my Shopify or online store need Phase 2 integration?
Yes, if the business is in a Phase 2 wave: online orders are usually simplified invoices that must be reported within 24 hours. Most stores use an app or middleware; check that it covers refunds and B2B buyers.
Can I keep issuing invoices from Excel?
No. Even Phase 1 requires a compliant electronic solution, and Phase 2 requires it to be integrated with Fatoora.
Does Saudi e-invoicing apply to my Oman company?
Saudi rules apply to taxpayers registered for VAT in Saudi Arabia. An Omani company with no Saudi VAT registration follows Oman's Fawtara rules instead, which become mandatory in 2027.
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