Saudi Arabia (ZATCA)
ZATCA E-Invoicing Compliance
Saudi Arabia leads the GCC in e-invoicing mandates. The Zakat, Tax and Customs Authority (ZATCA) has introduced a structured e-invoicing mandate built on two phases, each with a clear purpose and a defined set of technical requirements every business must meet.
Both phases are mandatory for all VAT-registered businesses in Saudi Arabia.
What are the two phases?
Generation phase - Make it right
Phase 1 is about how you create your invoice. All VAT-registered businesses must stop using paper, Word, or Excel invoices and instead generate invoices in a structured digital format (XML).
All required fields specified by ZATCA must be included in these invoices, and invoices must be kept electronically.
Effective: December 2021
Integration phase - Send it to ZATCA
Phase 2 is about how invoices are submitted to the government. Businesses must integrate their invoicing system via API with ZATCA's FATOORA platform.
Every invoice must be sent to ZATCA, receive clearance, and only then be shared with the buyer. No cleared invoice means no valid invoice.
Phase 2 rollout (wave-based)
Phase 2 rollout is wave-based, where businesses are onboarded in batches by annual revenue threshold.
| Wave | Revenue threshold | Effective date |
|---|---|---|
| Wave 1 | Above SAR 3 billion | January 2023 |
| Wave 2 | Above SAR 500 million | July 2023 |
| Wave 3 | Above SAR 250 million | October 2023 |
| Wave 4 | Above SAR 150 million | November 2023 |
| Wave 5 | Above SAR 100 million | December 2023 |
| Wave 6+ | Progressively lower thresholds | Ongoing 2024-2025 |