ZATCA announced the wave on 24 July 2026 and is notifying the businesses it covers directly. The threshold is half that of wave 24, so wave 25 reaches small shops, cafés and contractors that have never had to connect to ZATCA before. This guide shows how to check whether you are included, what integration requires, and what to do in the next three months.
How do I know if my business is in wave 25?
You are in wave 25 if your VAT-taxable revenue was above SAR 187,500 in at least one of the four years from 2022 to 2025, and you were not already included in an earlier wave. One year above the threshold is enough.
Worked example. A Riyadh café reports VAT-taxable revenue of SAR 150,000 in 2022, SAR 160,000 in 2023, SAR 175,000 in 2024 and SAR 210,000 in 2025. It is in wave 25, because 2025 is above SAR 187,500. Wave 25 is the first wave to count 2025 revenue.
| Year | Revenue (SAR) | Above SAR 187,500? |
|---|---|---|
| 2022 | 150,000 | No |
| 2023 | 160,000 | No |
| 2024 | 175,000 | No |
| 2025 | 210,000 | Yes, so the café is included |
ZATCA must notify each business at least six months before its integration date, and says it will contact every wave 25 taxpayer directly. Do not wait for the message: check your VAT returns for the four years now. SAR 187,500 is also the voluntary VAT registration threshold (mandatory registration starts at SAR 375,000), so businesses that registered voluntarily should check carefully.
How does wave 25 compare with earlier waves?
Wave 25 has the lowest threshold so far. The threshold has halved twice in a row, from SAR 750,000 in wave 23 to SAR 187,500 in wave 25.
| Wave | VAT-taxable revenue above (SAR) | Revenue years checked | Integration |
|---|---|---|---|
| 25 | 187,500 | 2022 to 2025 | No later than 1 February 2027 |
| 24 | 375,000 | 2022 to 2024 | 1 April to 30 June 2026 |
| 23 | 750,000 | 2022 to 2024 | 1 January to 31 March 2026 |
| 22 | 1,000,000 | 2022 to 2024 | 1 October to 31 December 2025 |
| 21 | 1,250,000 | 2022 to 2024 | 1 September to 30 November 2025 |
| 20 | 1,500,000 | 2022 or 2023 | 1 August to 31 October 2025 |
| 19 | 1,750,000 | 2022 or 2023 | 1 July to 30 September 2025 |
Two points follow from the pattern. First, ZATCA has announced each wave around six months ahead, in line with its notice rule. Second, ZATCA has not announced a wave 26 as of 27 October 2026, and it has not said whether every VAT-registered business will eventually be included. Businesses below SAR 187,500 should watch for the next announcement rather than assume they are exempt.
What does Phase 2 integration require?
Integration means your invoicing system sends every e-invoice to ZATCA's FATOORA platform: standard invoices for clearance before the buyer receives them, simplified invoices for reporting within 24 hours. Phase 1 only required you to generate electronic invoices.
| Standard tax invoice (mostly B2B) | Simplified tax invoice (mostly B2C) | |
|---|---|---|
| Sent to ZATCA | Before you share it with the buyer, for clearance | After you share it, within 24 hours, for reporting |
| Cryptographic stamp | Applied by FATOORA at clearance | Applied by your own system |
| QR code | Generated at clearance | Generated by your own system |
| Buyer details | Name, address and VAT number | Usually none |
Every invoice also needs:
- XML in UBL 2.1 format. A PDF/A-3 copy with the XML embedded may be shared as a readable version.
- A UUID, a unique identifier for each invoice.
- The previous invoice hash, which chains each invoice to the one before it.
- An invoice counter that rises by one for every invoice and note.
Each device or system that issues invoices, including every POS terminal, must be onboarded on the FATOORA portal with a one-time password and receives its own Cryptographic Stamp Identifier (CSID). For which invoice type to issue, see ZATCA Standard vs Simplified Tax Invoices: Which to Issue, With Examples.
What should you do before 1 February 2027?
Wave 25 businesses have just over three months. Plan to be integrated by mid-January, so a failed test still leaves time to fix it.
- Now: confirm you are included. Check VAT-taxable revenue for 2022 to 2025 and watch for ZATCA's notification.
- November 2026: check your software. Ask your ERP or POS vendor in writing whether the system supports Phase 2 integration, including clearance, reporting, the CSID and the previous invoice hash. Generation-only software from Phase 1 is not enough.
- November 2026: list every invoicing device. Count POS terminals, branch systems and any laptop that prints invoices. Each one needs its own onboarding.
- December 2026: clean customer data. B2B customers need a correct name, address and VAT number on file, because standard invoices are rejected without them.
- December 2026: onboard and test. Generate an OTP on the FATOORA portal for each device, obtain its CSID, then send test standard invoices for clearance and test simplified invoices for reporting.
- January 2027: train and switch over. Train cashiers and billing staff on what to do when a standard invoice is rejected or a terminal goes offline.
- By 1 February 2027: live. Every invoice now goes through FATOORA.
Where do small businesses get stuck with integration?
Wave 25 businesses are smaller than any before them, and in our ZATCA Phase 2 projects with HYP ERP customers the problems are rarely about the law. They are about devices, connectivity and the occasional business customer at the till.
| What we see | Why it matters | What to do |
|---|---|---|
| POS bought for Phase 1 only | It cannot clear or report invoices | Confirm Phase 2 support in writing or plan a replacement |
| One CSID shared across terminals | Each device needs its own onboarding | Onboard every terminal separately |
| Terminals that go offline | Simplified invoices must still be reported within 24 hours | Make sure the POS queues and sends invoices when it reconnects |
| Business customers buying at the till | Above SAR 1,000 they need a standard invoice | Capture the buyer's VAT number at the till, or invoice from the back office |
| Invoices deleted and re-issued | Each invoice is chained to the previous one by its hash | Correct with credit or debit notes, never by deleting |
HYP ERP is ZATCA Phase 2 certified, and in our projects each terminal is onboarded as part of the setup.
What are the penalties for not integrating?
ZATCA's current penalty scale starts with a written notice and up to three months to fix the problem, then rises with each repeat: SAR 1,000, SAR 5,000, SAR 10,000 and SAR 40,000. A repeat counts only if it happens within 12 months of the previous violation.
| Occurrence within 12 months | Penalty |
|---|---|
| First | Written notice, up to 3 months to comply |
| Second | SAR 1,000 |
| Third | SAR 5,000 |
| Fourth | SAR 10,000 |
| Fifth | SAR 40,000 |
The scale applies to violations such as not issuing or keeping e-invoices, invoices without a QR code, deleting or changing invoices after issue, and not reporting a system malfunction.
Some articles still quote fines of SAR 5,000 to 50,000. Check any figure against ZATCA's current penalty guide, listed in the Sources below.
ZATCA's fines-cancellation initiative runs until 31 December 2026, but it covers late registration, payment and filing fines and expressly excludes e-invoicing fines. ZATCA has published no procedure for extending a wave's integration deadline.
Sources
- ZATCA: wave 25 of e-invoicing integration, 24 July 2026
- ZATCA: e-invoicing roll-out phases
- ZATCA: E-Invoicing Implementation Resolution
- ZATCA: E-Invoicing Detailed Guideline
- ZATCA: VAT and e-invoicing violations and penalties
- ZATCA: fines-cancellation initiative to 31 December 2026
- EY: Saudi Arabia announces 25th wave, 10 August 2026
- EY: 23rd wave, with earlier wave thresholds, 7 July 2025