--- title: "ZATCA e-invoicing Phase 2: a guide for Saudi businesses" description: "ZATCA e-invoicing Phase 2 explained: who is in scope, the wave 24 and wave 25 deadlines, clearance and reporting, and how to prepare your business." url: https://1flux.ai/guides/zatca-e-invoicing last_updated: 2026-10-11 --- Guide # ZATCA e-invoicing Phase 2: a guide for Saudi businesses What ZATCA e-invoicing Phase 2 requires, who each wave covers, the deadlines that matter now and what to do before your integration date. Guide Updated 11 October 2026 ## In short ZATCA e-invoicing has two phases. Phase 1 (generation) has required resident VAT-registered businesses in Saudi Arabia to generate and store invoices electronically since 4 December 2021. Phase 2 (integration) connects each business's invoicing system to ZATCA, wave by wave since 1 January 2023: tax invoices are cleared by ZATCA before they reach the buyer, and simplified tax invoices are reported within 24 hours. Wave 25 must integrate by 1 February 2027. ## What is ZATCA e-invoicing? ZATCA e-invoicing is Saudi Arabia’s national [e-invoicing](https://1flux.ai/glossary/e-invoicing) system, run by the Zakat, Tax and Customs Authority (ZATCA). Under it, invoices, credit notes and debit notes are generated, exchanged and stored as structured electronic data, through an e-invoicing system that meets ZATCA’s requirements, rather than on paper or as editable documents. ZATCA is explicit that a paper invoice scanned or copied into electronic form isn’t an e-invoice. The rules distinguish two kinds of invoice: - **Tax invoice:** usually issued business to business (B2B) or to government, carrying every element a full [tax invoice](https://1flux.ai/glossary/tax-invoice) needs, including the buyer’s details. - **Simplified tax invoice:** usually issued to consumers (B2C), with a shorter set of required elements. ZATCA has rolled e-invoicing out in two phases: Phase 1 (generation) and Phase 2 (integration). Phase 1 applies to every resident VAT-registered business today. Phase 2 arrives business by business, in waves. ## Phase 1 and Phase 2 at a glance | | Phase 1: generation | Phase 2: integration | | ---------------- | ----------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | | Applies from | 4 December 2021 | 1 January 2023, in waves | | Who | Every VAT-registered business resident in Saudi Arabia, and anyone issuing tax invoices on a VAT-registered supplier’s behalf | The taxpayers ZATCA selects for each wave, by VAT-subject revenue | | What it requires | Generate and store invoices and notes with an electronic system that meets ZATCA’s Phase 1 requirements | Meet ZATCA’s Phase 2 technical requirements, issue invoices in the required format and connect the system to ZATCA’s platform | | Notice | Applies to everyone in scope | At least six months before your integration date | From ZATCA's roll-out phases page and wave announcements, checked on 11 October 2026. ## What is ZATCA e-invoicing Phase 2? ZATCA e-invoicing Phase 2, the integration phase, connects your e-invoicing system directly to ZATCA. From your integration date, each invoice is issued as structured XML with additional fields, and ZATCA sees it either before or after the buyer does, depending on the type of invoice. | | Standard tax invoice: clearance | Simplified tax invoice: reporting | | ----------------------- | ------------------------------------------------------------------------- | ----------------------------------------------------------- | | Usually issued to | Other businesses and government | Consumers | | When ZATCA sees it | Before the buyer: ZATCA must clear it before it’s shared | After the sale: reported within 24 hours of being generated | | Who stamps it | ZATCA adds its cryptographic stamp and QR code when it clears the invoice | The seller’s own system stamps it and adds the QR code | | What the buyer receives | The cleared invoice | A copy at the point of sale | Based on ZATCA's Detailed Guidelines for E-Invoicing. Check ZATCA's current guidelines before you build or buy. Before it can clear or report anything, each invoicing unit (a server, a till or a branch system) is onboarded with ZATCA and receives a cryptographic stamp identifier (CSID). The unit uses it to sign simplified invoices and to connect to ZATCA. Credit and debit notes follow the same route as the invoice they relate to. ## Who is in scope for Phase 2, and when? ZATCA brings businesses into Phase 2 in waves. For each wave it publishes a revenue threshold and the years it looks at, notifies the taxpayers in the wave directly, and gives them at least six months before their integration date. 1. 4 December 2021 ### Phase 1 begins Every VAT-registered business resident in Saudi Arabia generates and stores invoices and notes electronically. 2. 1 January 2023 ### Phase 2 begins, in waves ZATCA starts bringing taxpayers into integration, wave by wave, selected by VAT-subject revenue. 3. 30 June 2026 ### Wave 24 deadline Taxpayers whose VAT-subject revenue exceeded SAR 375,000 in 2022, 2023 or 2024 had to integrate by this date. 4. 1 February 2027 ### Wave 25 deadline Taxpayers whose VAT-subject revenue exceeded SAR 187,500 in any year from 2022 to 2025 must integrate by this date. Wave 25 was announced on 24 July 2026. Its threshold is half of wave 24’s, and it adds 2025 to the years ZATCA looks at. To check where you stand, take your VAT-subject revenue for each calendar year from 2022 to 2025. If any single year exceeds SAR 187,500, plan for 1 February 2027 and look out for ZATCA’s notice. If you run more than one VAT-registered company, check each one separately. ## What changes for your business in Phase 2? Phase 1 changed how invoices are produced. Phase 2 changes when an invoice becomes valid, and who has to see it first. - **Every invoice and note goes through ZATCA.** Standard tax invoices can’t be sent to a customer until ZATCA has cleared them; simplified tax invoices are reported within 24 hours. - **Each invoicing system is registered.** Every unit that issues invoices is onboarded with ZATCA and holds its own CSID. - **The format is stricter.** Invoices carry additional fields in ZATCA’s structured format, and ZATCA validates them against its rules. - **Exceptions need an owner.** Someone has to deal with a rejected invoice or a connection problem quickly, because a B2B invoice isn’t valid until it’s cleared. - **Customer data matters more.** A tax invoice carries the buyer’s details, so incomplete or badly formatted customer records stop invoices, not just reports. Your Phase 1 obligations continue: invoices and notes are still generated and stored electronically. ## How to prepare for your integration date Use these lists to plan the months before your wave. Tick items as you go; your progress stays in this browser, and **Print** gives you a paper copy. Before ZATCA's notice 0 of 5 done - \[ ] Work out VAT-subject revenue for each year from 2022 to 2025, for each VAT-registered company. - \[ ] List every system that issues invoices or notes: ERP, accounting package, point of sale, branch systems and spreadsheets. - \[ ] Check that customer records are complete, including each business buyer's VAT number and address. - \[ ] Decide whether your ERP will handle Phase 2 itself or work with a separate e-invoicing provider. - \[ ] Confirm your Phase 1 set-up: every tax invoice and note is generated and stored electronically. Before your integration date 0 of 5 done - \[ ] Onboard each invoicing unit with ZATCA, so each one holds its own CSID. - \[ ] Test standard tax invoices, simplified tax invoices, credit notes and debit notes in a test environment. - \[ ] Agree who handles a rejected invoice or a connection failure, and how fast. - \[ ] Show sales and finance what changes at the point of invoicing. - \[ ] Keep the archive of invoices issued before integration. ## What should you ask an ERP or e-invoicing vendor? Ask for demonstrations, not assurances. A vendor that already handles Phase 2 can show each of these in a test environment. 1. Show me a standard tax invoice cleared by ZATCA and a simplified tax invoice reported, end to end. 2. How is each invoicing unit onboarded, and who manages its CSID when it needs renewing? 3. Which documents are covered: tax invoices, simplified tax invoices, credit notes and debit notes? 4. What happens when ZATCA rejects an invoice, or when its platform doesn’t respond? 5. Does the e-invoice come from the same invoice that posts to the ledger, or from a copy in a separate tool? 6. Who updates the integration when ZATCA changes its specifications, and how quickly? 7. Is e-invoicing included in the price, or charged per invoice, per unit or per company? For a wider set of questions, read [how to choose an ERP](https://1flux.ai/guides/erp-buyers-guide-gcc). If you also trade in the UAE, its rules work differently: see our guide to the [UAE e-invoicing mandate](https://1flux.ai/guides/uae-e-invoicing). ## How 1flux fits In 1flux SA Sadaf Trading Company · SA · SAR - Registrations Commercial registration (CR), VAT number and unified number on the legal entity - VAT 15% and zero-rated codes, applied per line with dated rates - Address Saudi National Address in structured fields, with Arabic twins and validation - Customers Each customer’s Saudi National Address stored in the same validated format 1flux is an ERP for B2B trade that runs CRM, quotations, sales orders, purchasing, inventory and accounting in one flow. A Saudi company runs in 1flux as its own legal entity, with its [commercial registration](https://1flux.ai/glossary/commercial-registration), VAT number, unified number and national address on its profile, and 15% VAT codes applied per line with dated rates. Customer addresses are stored as a structured [Saudi National Address](https://1flux.ai/glossary/saudi-national-address) with Arabic twin fields. Sales invoices are raised from delivered goods and post the receivable, revenue and output VAT automatically, as our [quote-to-cash guide](https://1flux.ai/guides/quote-to-cash) describes. [ZATCA e-invoicing in 1flux](https://1flux.ai/products/e-invoicing/zatca) [ERP for Saudi Arabia](https://1flux.ai/solutions/saudi-arabia) ## Sources Reviewed 11 October 2026 Dates, thresholds and requirements in this guide come from ZATCA’s own pages and announcements, listed below, and were checked on 11 October 2026. ZATCA updates its guidelines and announces new waves directly to taxpayers, so confirm what applies to your business with ZATCA or your tax adviser before relying on it. 1. 1 [ZATCA: What is e-invoicing](https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/What-is-e-invoicing.aspx) (zatca.gov.sa) 2. 2 [ZATCA: E-invoicing roll-out phases](https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/Roll-out-phases.aspx) (zatca.gov.sa) 3. 3 [ZATCA: criteria for wave 24 of the integration phase (26 September 2025)](https://zatca.gov.sa/en/Pages/news-1426.aspx) (zatca.gov.sa) 4. 4 [ZATCA: criteria for wave 25 of the integration phase (24 July 2026)](https://zatca.gov.sa/en/MediaCenter/News/Pages/Wave25-E-invoicing.aspx) (zatca.gov.sa) 5. 5 [ZATCA: Detailed Guidelines for E-Invoicing, version 2 (May 2023)](https://zatca.gov.sa/en/e-invoicing/introduction/guidelines/documents/e-invoicing_detailed__guideline.pdf) (zatca.gov.sa) FAQ ## Questions, answered Still deciding? [Talk to sales](https://1flux.ai/contact) ### Is ZATCA e-invoicing Phase 2 mandatory? Yes. Phase 2 is mandatory for the taxpayers ZATCA selects in each wave. ZATCA chooses each wave by VAT-subject revenue and notifies the businesses in it directly, at least six months before their integration date. Wave 25 covers revenue above SAR 187,500 in any year from 2022 to 2025, with an integration deadline of 1 February 2027. ### Does Phase 1 apply before my Phase 2 wave arrives? Yes. Phase 1 has applied to every VAT-registered business resident in Saudi Arabia since 4 December 2021, whatever its Phase 2 wave. Tax invoices, simplified tax invoices, credit notes and debit notes must already be generated and stored with an electronic system that meets ZATCA's Phase 1 requirements. A paper invoice scanned into a computer doesn't count. ### Do B2B invoices need ZATCA's clearance before the buyer receives them? Yes. In Phase 2, standard tax invoices, usually issued to other businesses, must be cleared by ZATCA before they're shared with the buyer. Simplified tax invoices, usually issued to consumers, follow a reporting model instead: the seller gives the buyer a copy straight away and reports the invoice to ZATCA within 24 hours of generating it. ### Can one strong year bring my business into wave 25? Yes. Wave 25 looks at VAT-subject revenue in each of 2022, 2023, 2024 and 2025. If revenue exceeded SAR 187,500 in any one of those years, the business falls within the wave's criteria, even if revenue has fallen since. ZATCA notifies the taxpayers in each wave directly, so check your notices as well as your own figures. ### Do credit and debit notes follow the same rules as invoices? Yes. ZATCA's e-invoicing rules cover tax invoices, simplified tax invoices and the credit and debit notes linked to them. Each note is issued in the same structured format and follows the same clearance or reporting route as the invoice it relates to, so test returns, price corrections and cancellations as well as ordinary sales before your integration date. ### Will ZATCA announce more waves after wave 25? Yes. ZATCA brings taxpayers into Phase 2 gradually and informs each later wave directly, at least six months before its integration date, publishing the selection criteria on its website. When we checked on 11 October 2026, wave 25 was the latest wave ZATCA had announced. If your revenue is below the wave 25 threshold, keep Phase 1 in place and watch for ZATCA's next announcement. ### Should I ask an ERP vendor to demonstrate ZATCA Phase 2? Yes. Ask the vendor to show a standard tax invoice cleared and a simplified tax invoice reported, end to end, in a test environment. Ask how each invoicing unit is onboarded with ZATCA, whether credit and debit notes are covered, who updates the integration when ZATCA changes its specifications, and whether e-invoicing is included in the price. Related ## Keep exploring ### [ZATCA e-invoicing](https://1flux.ai/products/e-invoicing/zatca) E-invoicing for your Saudi company, from the invoices you raise for delivered goods. ### [UAE e-invoicing guide](https://1flux.ai/guides/uae-e-invoicing) Scope, exclusions, ASP deadlines, go-live dates, penalties and a checklist. ### [ERP buyer's guide](https://1flux.ai/guides/erp-buyers-guide-gcc) How to choose an ERP: requirements, vendor questions, demo scripts, five-year cost and a scoring table. ### [Quote-to-cash guide](https://1flux.ai/guides/quote-to-cash) The eight stages from enquiry to cash in the bank, with the documents, controls, KPIs and a checklist. ### [E-invoicing](https://1flux.ai/glossary/e-invoicing) Issuing invoices in a structured format that tax systems can read and validate. ### [ERP for Saudi Arabia](https://1flux.ai/solutions/saudi-arabia) A Saudi company set up properly: 15% VAT, CR, national address, Arabic quotations and ZATCA e-invoicing. Last updated 11 October 2026