Guide · Last reviewed October 2026

ZATCA Phase 2 Readiness: Requirements, Waves and Go-Live Checklist

This guide is for finance teams in Saudi Arabia, and in UAE and other MENA groups with Saudi entities, that must connect invoicing to ZATCA's FATOORA platform. After reading, you will know which wave applies to you, what Phase 2 changes day to day, and what to do between ZATCA's notification and go-live.

In short

  • ZATCA e-invoicing Phase 1 (Generation) has applied since 4 December 2021, and Phase 2 (Integration) has been enforced in waves since 1 January 2023 [1].
  • ZATCA selects Phase 2 waves by revenue subject to VAT; the latest, Wave 25, covers revenue above SAR 187,500 in 2022, 2023, 2024 or 2025, with integration no later than 1 February 2027 [32].
  • ZATCA must notify each target group of the implementation procedures at least six months before its due date [2].
  • Standard tax invoices (usually B2B) and their notes go through clearance, while simplified tax invoices (usually B2C) and their notes must be reported within 24 hours of generation [2][3].
  • Phase 2 invoices must be generated by an onboarded e-invoice generation solution (EGS) unit, in XML or PDF/A-3 with embedded XML, and are submitted to FATOORA in XML [3].
  • Credit and debit notes follow the route of the original invoice, must state the reason for issue and, where applicable, reference the original invoice [2][3].

What ZATCA Phase 1 and Phase 2 are

ZATCA defines an electronic invoice as a tax invoice generated in a structured electronic format through an electronic solution; a scanned or copied paper invoice does not count. The rules cover tax invoices, simplified tax invoices, credit notes and debit notes [5].

Phase 1 (Generation) has applied since 4 December 2021 to all taxpayers subject to the E-Invoicing Regulation, excluding non-resident taxpayers, and to any party issuing tax invoices on behalf of a VAT-registered supplier [1][5]. Invoices must come from a compliant electronic solution with the required fields, including a QR code [8].

Phase 2 (Integration) started on 1 January 2023, adding technical and business requirements and integration with ZATCA’s systems [1]. Until your wave’s date, Phase 1 rules continue to apply [3].

The Implementation Resolution excludes some transactions from the e-invoicing requirements, including fully VAT-exempt supplies and related advance payments, reverse charge supplies and imports [2].

ZATCA Phase 2 waves and deadlines

Each wave covers taxpayers whose revenue subject to VAT exceeded a threshold in any listed reference year. ZATCA notifies them directly, at least six months before the due date, by the email and mobile number registered with it [2][3]. Announcements for Waves 1 to 16 gave a start date; from Wave 17, ZATCA gives a completion deadline.

Wave VAT-subject revenue exceeding Reference year(s) Integration date stated by ZATCA Source
1 SAR 3 billion 2021 From 1 Jan 2023 [8]
2 SAR 500 million 2021 From 1 Jul 2023 [9]
3 SAR 250 million 2021 or 2022 From 1 Oct 2023 [10]
4 SAR 150 million 2021 or 2022 From 1 Nov 2023 [11]
5 SAR 100 million 2021 or 2022 From 1 Dec 2023 [12]
6 SAR 70 million 2021 or 2022 From 1 Jan 2024 [13]
7 SAR 50 million 2021 or 2022 From 1 Feb 2024 [14]
8 SAR 40 million 2021 or 2022 From 1 Mar 2024 [15]
9 SAR 30 million 2021 or 2022 From 1 Jun 2024 [16]
10 SAR 25 million 2022 or 2023 From 1 Oct 2024 [17]
11 SAR 15 million 2022 or 2023 From 1 Nov 2024 [18]
12 SAR 10 million 2022 or 2023 From 1 Dec 2024 [19]
13 SAR 7 million 2022 or 2023 From 1 Jan 2025 [20]
14 SAR 5 million 2022 or 2023 From 1 Feb 2025 [21]
15 SAR 4 million 2022 or 2023 From 1 Mar 2025 [22]
16 SAR 3 million 2022 or 2023 From 1 Apr 2025 [23]
17 SAR 2.5 million 2022 or 2023 No later than 31 Jul 2025 [24]
18 SAR 2 million 2022 or 2023 No later than 31 Aug 2025 [25]
19 SAR 1.75 million 2022 or 2023 No later than 30 Sep 2025 [26]
20 SAR 1.5 million 2022 or 2023 No later than 31 Oct 2025 [27]
21 SAR 1.25 million 2022, 2023 or 2024 No later than 30 Nov 2025 [28]
22 SAR 1 million 2022, 2023 or 2024 No later than 31 Dec 2025 [29]
23 SAR 750,000 2022, 2023 or 2024 No later than 31 Mar 2026 [30]
24 SAR 375,000 2022, 2023 or 2024 No later than 30 Jun 2026 [31]
25 SAR 187,500 2022, 2023, 2024 or 2025 No later than 1 Feb 2027 [32]

As of October 2026, Wave 25 is the most recent wave announced on zatca.gov.sa. It is the first to count 2025 revenue, so a business that crossed SAR 187,500 only in 2025 can fall within it [32].

Clearance vs reporting: ZATCA Phase 2 requirements by invoice type

Standard tax invoice (usually B2B) Simplified tax invoice (usually B2C)
Phase 2 process Clearance: ZATCA validates the invoice and stamps it [2][3] Reporting: the taxpayer shares the stamped invoice with ZATCA [2][3]
Timing Cleared before it is shared with the buyer [3] Reported within 24 hours of generation [2]
Sharing with the buyer After clearance [3] Immediately, as a printed copy, before reporting [3]
QR code Generated by ZATCA at clearance [3] Generated by the solution, 9 tags in TLV base64 format [3]

The Implementation Resolution also states that, to claim input tax deduction, electronic invoices and notes should be cleared by or reported to ZATCA, from a date ZATCA will set in a later resolution [2], and ZATCA’s guidelines note that uncleared invoices are not eligible for VAT deduction [3], so B2B customers will expect cleared invoices.

If ZATCA’s systems do not respond, the solution keeps re-submitting the same invoice; for a B2B sale the seller may then share the uncleared invoice until a compliant one is issued [3].

Technical requirements a finance manager needs to know

You do not need the XML specifications, but you should recognize these terms:

  • EGS unit: each solution unit or device that issues invoices. Every device issuing invoices under the same VAT number should be registered [3].
  • Onboarding on FATOORA: log in to the FATOORA portal (fatoora.zatca.gov.sa) with your ZATCA credentials, generate OTP codes for one or more EGS units and enter them in the solution while they are valid (1 hour). The portal also lists, renews and revokes devices [4].
  • Cryptographic stamp and CSID: the stamp proves each invoice’s origin and integrity; the cryptographic stamp identifier (CSID) links an EGS unit to ZATCA. The private stamping key must not be exportable [3].
  • UUID: a unique identifier the solution generates and stores in each XML invoice [3].
  • Invoice hash and counter: a hash shows the invoice has not been altered, and invoices from one EGS unit are chained through the previous invoice hash. The counter increments for every invoice or note and cannot be reset [3].
  • Formats: Phase 2 invoices are generated in XML or PDF/A-3 with embedded XML, and submitted to FATOORA in XML only [2][3]. The human-readable invoice must be in Arabic, and other languages may be added [3].
  • Testing: an optional FATOORA simulation portal supports end-to-end functional testing; devices are onboarded to simulation and production separately [4].

The solution must not allow generated invoices or notes to be altered or deleted [3]. Invoices and notes must be stored so they can be provided to ZATCA on request, under the record-keeping rules of the VAT Implementing Regulation [2].

Phase 2 readiness checklist: from notification to go-live

ZATCA’s guidance sets out the formal steps: update the solution to Phase 2 requirements, request OTPs on the FATOORA portal, enter them in the solution, check that it was onboarded, then issue invoices through the integrated solution [3]. The timing below is a suggested plan, not a ZATCA rule.

On notification (at least six months before your date)

Build and clean data (months 2 to 4)

Test (months 4 to 5)

Go-live (final weeks)

Credit and debit notes under Phase 2

Credit and debit notes follow the route of the invoice they adjust: cleared for standard tax invoices, reported within 24 hours for simplified ones [3]. Each note must state the reason for issue under the VAT Implementing Regulation and, where applicable, reference the original invoice or invoices [2]. Issued invoices cannot be altered, deleted or cancelled, so a mistake is corrected with a credit note and, where needed, a new invoice [3].

Common Phase 2 mistakes

  • Treating a PDF as the e-invoice; ZATCA receives XML [2][3].
  • Onboarding the ERP but forgetting POS terminals or branch devices [3].
  • Sending standard invoices to customers before clearance [3].
  • Letting simplified invoice reporting queue up beyond 24 hours [2].
  • Editing or deleting issued invoices instead of using credit notes [3].
  • Not telling ZATCA about a malfunction that stops invoicing; use its e-invoicing failure notification service [7].

On penalties, the Implementation Resolution applies the VAT Law’s penalties to violations [2]. ZATCA’s 2021 announcement stated that not issuing electronic invoices starts with a SAR 5,000 fine and deleting or amending e-invoices after issue with a SAR 10,000 fine, while a missing QR code on simplified invoices, a missing buyer VAT number on tax invoices or an unreported malfunction starts with a warning. Fines then depend on the violation type and number of repetitions [6].

Sources

  1. Roll-out Phases (E-Invoicing) — Zakat, Tax and Customs Authority (ZATCA) — https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/Roll-out-phases.aspx (accessed October 2026)
  2. Controls, Requirements, Technical Specifications and Procedural Rules for Implementing the Provisions of the E-Invoicing Regulation (Implementation Resolution, May 2023 version) — ZATCA — https://zatca.gov.sa/en/E-Invoicing/Introduction/LawsAndRegulations/Documents/20230519_E-Invoicing%20Implementation%20Resolution%20English.pdf (accessed October 2026)
  3. E-Invoicing Detailed Guidelines, Version 2, May 2023 — ZATCA — https://zatca.gov.sa/en/E-Invoicing/Introduction/Guidelines/Documents/E-Invoicing_Detailed__Guideline.pdf (accessed October 2026)
  4. FATOORA Portal User Manual, Version 3, May 2023 — ZATCA — https://zatca.gov.sa/en/E-Invoicing/Introduction/Guidelines/Documents/Fatoora_Portal_User_Manual_English.pdf (accessed October 2026)
  5. What is E-Invoicing — ZATCA — https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/What-is-e-invoicing.aspx (accessed October 2026)
  6. ZATCA releases the Violations and Fines related to E-invoicing (16 November 2021) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/E-invoicing-Violations-Fines.aspx (accessed October 2026)
  7. E-invoicing Failure Notifications — ZATCA — https://zatca.gov.sa/en/E-Invoicing/FailureNotifications/Pages/VerifyTaxpayer.aspx (accessed October 2026)
  8. Phase 2 integration, Wave 1 announcement (24 June 2022) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/E-Invoicing-Phase-2-ntegration.aspx (accessed October 2026)
  9. Wave 2 integration criteria (23 December 2022) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/Phase2-Wave2-Integration-Criteria.aspx (accessed October 2026)
  10. Wave 3 announcement (24 March 2023) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1023.aspx (accessed October 2026)
  11. Wave 4 announcement (28 April 2023) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1039.aspx (accessed October 2026)
  12. Wave 5 announcement (26 May 2023) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1051.aspx (accessed October 2026)
  13. Wave 6 announcement (16 June 2023) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1063.aspx (accessed October 2026)
  14. Wave 7 announcement (28 July 2023) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1084.aspx (accessed October 2026)
  15. Wave 8 announcement (18 August 2023) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1089.aspx (accessed October 2026)
  16. Wave 9 announcement (17 November 2023) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1134.aspx (accessed October 2026)
  17. Wave 10 announcement (29 March 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1220.aspx (accessed October 2026)
  18. Wave 11 announcement (26 April 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1231.aspx (accessed October 2026)
  19. Wave 12 announcement (24 May 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1243.aspx (accessed October 2026)
  20. Wave 13 announcement (28 June 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/E-invoicing-Wave-13.aspx (accessed October 2026)
  21. Wave 14 announcement (26 July 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1268.aspx (accessed October 2026)
  22. Wave 15 announcement (30 August 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1279.aspx (accessed October 2026)
  23. Wave 16 announcement (27 September 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/E-invoicing-Wave-16.aspx (accessed October 2026)
  24. Wave 17 announcement (1 November 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1300.aspx (accessed October 2026)
  25. Wave 18 announcement (29 November 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1312.aspx (accessed October 2026)
  26. Wave 19 announcement (27 December 2024) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news-1327.aspx (accessed October 2026)
  27. Wave 20 announcement (31 January 2025) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/e-invoicing-wave-20-2025.aspx (accessed October 2026)
  28. Wave 21 announcement (28 February 2025) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/e-invoicing-wave-21-2025.aspx (accessed October 2026)
  29. Wave 22 announcement (21 March 2025) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/news_1361.aspx (accessed October 2026)
  30. Wave 23 announcement, Arabic (27 June 2025) — ZATCA — https://zatca.gov.sa/ar/MediaCenter/News/Pages/news_1396.aspx (accessed October 2026)
  31. Wave 24 announcement (26 September 2025) — ZATCA — https://zatca.gov.sa/en/Pages/news-1426.aspx (accessed October 2026)
  32. Wave 25 announcement (24 July 2026) — ZATCA — https://zatca.gov.sa/en/MediaCenter/News/Pages/Wave25-E-invoicing.aspx (accessed October 2026)

This guide is general information based on official sources as of October 2026. Confirm your specific situation with the authority or a qualified adviser.

HYP ERP

How HYP ERP helps

HYP ERP is a ZATCA Phase 2 certified e-invoicing solution with direct FATOORA integration, built into HYP ERP and the HYPOS point of sale. It issues standard tax invoices to business customers from HYP ERP sales and sends them through clearance, and reports simplified invoices from HYPOS through the same engine. It generates the QR code and the structured electronic content automatically for each applicable invoice. Finance teams can monitor ZATCA responses and invoice statuses, follow up rejected or incomplete invoices, and keep e-invoices archived alongside the accounting records. For groups with entities in the UAE and Saudi Arabia, GCC Compliance keeps each entity's tax records in one financial environment. Each Saudi taxpayer still completes ZATCA onboarding, and the deployment is configured and tested for its invoices before go-live.

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ZATCA Phase 2 readiness FAQs

How do I know which ZATCA Phase 2 wave my business is in?

ZATCA notifies selected taxpayers directly, by the email and mobile number registered with it, at least six months before the integration date [2][3]. You can also compare your revenue subject to VAT in each reference year with the published wave thresholds above.

What is the deadline for ZATCA Wave 25?

Taxpayers in Wave 25 must integrate their e-invoicing solutions with FATOORA no later than 1 February 2027. The wave covers taxpayers whose revenue subject to VAT exceeded SAR 187,500 in 2022, 2023, 2024 or 2025. ZATCA announced it on 24 July 2026 [32].

What is the difference between clearance and reporting?

Clearance applies to standard tax invoices and their notes: ZATCA validates and stamps them before they are shared with the buyer. Reporting applies to simplified tax invoices and their notes: you give the invoice to the customer at once and report it to ZATCA within 24 hours of generation [2][3].

Is a PDF invoice enough for ZATCA Phase 2?

No. Phase 2 invoices must be generated in XML or in PDF/A-3 with the XML embedded, and the submission to FATOORA must be in XML [2][3]. A plain PDF or a scanned paper invoice is not an electronic invoice under ZATCA's definition [5].

Does every POS device need to be onboarded on FATOORA?

Yes. ZATCA's guidelines state that every device issuing invoices under the same VAT number should be registered [3]. On the FATOORA portal you generate OTP codes for your EGS units and enter them in the solution within the 1-hour validity of each code [4].

What happens if ZATCA rejects an invoice?

A rejected invoice is not cancelled or edited. You correct the errors and submit another invoice for clearance [3]. Corrections to invoices already cleared or reported are made with credit or debit notes [3].

Do non-resident companies need to comply with ZATCA e-invoicing?

No. Non-resident taxpayers are excluded; the phases apply to resident taxpayers subject to the E-Invoicing Regulation and to parties issuing tax invoices on behalf of VAT-registered suppliers [1][3]. A UAE group should check each Saudi resident entity against the wave criteria.

Related HYP ERP pages

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