Key facts, deadlines, and compliance requirements for Saudi Arabia's ZATCA e-invoicing system.
Saudi Arabia operates a fully integrated e-invoicing system through ZATCA's FATOORAH platform. Through ZATCA's FATOORAH platform, the Kingdom has built a clearance model where B2B and B2G invoices must be approved by the tax authority before they can be issued to the buyer. This gives ZATCA real-time control over the entire invoicing chain.
The mandate covers B2B, B2G, and B2C transactions, covering all transaction types. Phase 1, which required all VAT-registered businesses to generate compliant e-invoices, has been in effect since December 2021. Phase 2 adds integration with FATOORAH and is being rolled out in revenue-based waves.
How many integration waves has ZATCA announced?
24 waves as of 2026. Wave 23 covers taxpayers with turnover above SAR 750,000. Wave 24 (by June 2026) lowers the threshold to SAR 375,000 for the first time.
Phase 2 integration is being deployed in over 24 waves, starting with the largest taxpayers (revenue above SAR 3 billion in January 2023) and progressively lowering the threshold. By mid-2026, businesses with revenue above SAR 375,000 will be required to integrate, with further waves expected to bring in even smaller entities.
What is the current Phase 2 revenue threshold?
SAR 375,000 as of Wave 24 (June 2026). The threshold has been progressively lowered from SAR 3 billion in January 2023.
Every VAT-registered taxpayer in Saudi Arabia must generate e-invoices that conform to ZATCA's specifications, regardless of revenue. This is the Phase 1 requirement and has been in effect since December 2021. Phase 2 adds the obligation to integrate directly with the FATOORAH platform via API.
Phase 2 integration is triggered by revenue threshold. Businesses receive notification from ZATCA when their wave approaches. B2C transactions follow a slightly different path: they require near real-time reporting with cryptographic stamps and QR codes, but not the full pre-clearance that B2B invoices undergo.
What is the difference between Phase 1 and Phase 2?
Phase 1 (since December 2021) requires all VAT-registered businesses to generate compliant e-invoices. Phase 2 adds mandatory API integration with the FATOORAH platform for real-time clearance and reporting.
For B2B and B2G invoices, Saudi Arabia uses a clearance model. The seller's system submits the invoice to FATOORAH via API. ZATCA validates the invoice, applies a cryptographic stamp, and returns it with approval. Only then can the invoice be sent to the buyer. This pre-clearance step ensures every tax invoice has been verified before it enters circulation.
B2C invoices take a different path: they are generated locally with a cryptographic stamp and QR code, then reported to FATOORAH in near real-time. The invoice format is UBL 2.1 with ZATCA-specific extensions, and all invoices must include a unique identifier assigned by the system.
How long must invoices be retained in Saudi Arabia?
6 years for standard invoices per ZATCA VAT Implementing Regulations Article 66. Movable capital assets: 11 years. Immovable capital assets: 15 years. Storage must be within Saudi Arabia.
ZATCA enforces strict penalties for both Phase 1 and Phase 2 violations. Non-compliance can block a business from issuing valid invoices entirely, since the clearance model means an unapproved invoice has no legal standing. Penalties cover everything from system implementation failures to incorrect invoice data.
What happens if a B2B invoice is not cleared by FATOORAH?
The invoice has no legal standing. Since the clearance model requires ZATCA approval before issuance, an uncleared invoice simply cannot be sent to the buyer.
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