Saudi e-invoicing (FATOORA): Phase 1 and Phase 2 explained

In short: since 4 December 2021, everyone subject to Saudi Arabia's E-Invoicing Regulation must generate invoices electronically (Phase 1). Phase 2, integration with ZATCA's FATOORA platform, is rolled out in waves by revenue subject to VAT. The latest announced wave, Wave 25, covers taxpayers above SAR 187,500 and must integrate no later than 1 February 2027.

Phase 1: generation

From 4 December 2021, all persons subject to the E-Invoicing Regulation must generate electronic invoices and electronic notes. Handwritten invoices, and invoices produced in text editors or spreadsheets, stopped being acceptable.

Phase 2: integration

Phase 2 started on 1 January 2023 and applies in waves of taxpayers that ZATCA selects. ZATCA notifies taxpayers of their wave at least six months in advance. Under the implementation resolution:

• E-invoices and e-notes must be generated in XML, or PDF/A-3 with embedded XML.
• They must carry a cryptographic stamp.
• Standard tax invoices (B2B) are cleared by ZATCA before they are shared with the buyer.
• Simplified tax invoices (B2C) must be reported to ZATCA within 24 hours.
• The invoicing solution must generate a QR code and keep a tamper-resistant invoice counter.

What is outside the regulation

• Supplies that are fully exempt from VAT, and prepayments for them.
• Supplies subject to VAT under the reverse charge mechanism.
• Imports of goods into the Kingdom.

Waves and deadlines

The thresholds, revenue years and deadlines for each wave are explained in ZATCA integration waves. Deadlines apply only to the taxpayers ZATCA selects for that wave.

ZATCA publishes the implementation resolution in Arabic with an English translation; where they differ, the Arabic text prevails. All GCC deadlines are in the e-Invoicing Readiness Tracker.