Saudi Arabia e-Invoicing (FATOORAH) Phase 2 Waves Update

Saudi Arabia's FATOORAH e-Invoicing Waves

Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) is implementing its mandatory e-invoicing system, FATOORAH, in two main stages. Phase 1 (Generation) required taxpayers to issue compliant electronic invoices. Phase 2 (Integration) connects taxpayers' invoicing systems directly to ZATCA's central platform, routing B2B invoices through a clearance model and B2C invoices through a reporting model.

Phase 2 is not applied to all taxpayers simultaneously. Instead, ZATCA groups taxpayers into waves defined by annual turnover thresholds, with a distinct integration start date assigned to each group. According to the announcement, each wave captures businesses above a specified revenue level, and ZATCA generally notifies affected taxpayers individually several months before their go-live date.

Who is affected?

All VAT-registered businesses in Saudi Arabia exceeding the relevant turnover threshold fall within scope. Phase 2 invoices must satisfy technical requirements such as a cryptographic stamp, a unique identifier (UUID), a QR code, and the mandated XML format. Non-compliance can trigger administrative penalties.

What to do

Businesses should first confirm which wave their turnover corresponds to and the applicable integration date. They should then align their ERP/invoicing solution with ZATCA's technical documentation, complete solution onboarding on the Fatoora platform, and finish integration testing ahead of the deadline.

Because thresholds and dates differ by wave, it is important to verify the current wave schedule and technical requirements directly through official ZATCA announcements.

Source: ZATCA / VATCalc — https://www.vatcalc.com/saudi-arabia/saudi-arabia-2023-mandatory-e-invoices-fatoorah-july-2023-wave-2/