ZATCA Announced Wave 10 Under Phase 2 of Saudi Arabia e-Invoicing

Zakat, Tax and Customs Authority (ZATCA) announced the tenth wave under phase 2 of Saudi e-invoicing. Also, it clarified that Value Added Tax (VAT) registered businesses having more than SAR 25 million turnover during 2022 or 2023 fall under wave 10 of phase 2.

Accordingly, applicable taxpayers shall start integrating their e-invoicing solutions with the Fatoora portal by 1st October 2024.

The Authority mentioned that phase 2 requires additional requirements such as:

• Integration of e-invoicing solutions with the Fatoora portal
• Including additional fields in the invoice
• Issuing e-invoices in the notified format

Further, ZATCA announces the applicability of phase 2 to applicable businesses a minimum of six months before the integration date.

Accordingly, ZATCA announced the below waves till now:

• Wave 1 under phase 2: Businesses registered in KSA whose turnover was more than SAR 3 billion in 2021 must integrate with Fatoora from 1st January 2023.
• Wave 2 under phase 2: VAT-registered businesses in Saudi whose turnover was between SAR 500 million and SAR 3 billion in 2021 shall integrate starting 1st July 2023.
• Wave 3 under phase 2: KSA VAT-registered businesses whose turnover was between SAR 250 million and less than SAR 500 million in 2021 or 2022 shall integrate from 1st October 2023.
• Wave 4 under phase 2: Saudi businesses registered under VAT having more than SAR 150 million and less than SAR 250 million turnover in 2021 or 2022 shall integrate with ZATCA starting from 1st November 2023.
• Wave 5 under phase 2: VAT-registered businesses in KSA whose turnover is between SAR 100 million and SAR 150 million in 2021 or 2022 shall integrate with ZATCA w.e.f 1st December 2023.
• Wave 6 under phase 2: Taxpayers under KSA VAT whose turnover was between SAR 70 million and SAR 100 million in 2021 or 2022 must integrate with ZATCA by 1st January 2024.
• Wave 7 under phase 2: KSA VAT-registered businesses in KSA whose turnover is between SAR 50 million and SAR 70 million in 2021 or 2022 must integrate with the Fatoora portal w.e.f 1st February 2024.
• Wave 8 under phase 2: Taxpayers registered under KSA VAT having more than SAR 40 million and less than SAR 50 million turnover in 2021 or 2022 must integrate with the Fatoora portal w.e.f 1st March 2024.
• Wave 9 under phase 2: Taxpayers registered under KSA VAT whose turnover was between SAR 30 million and SAR 40 million in 2021 or 2022 must integrate with the Fatoora portal w.e.f 1st June 2024.

ZATCA stated that phase 2 of e-invoicing results in digital transformation and economic development. Further, the Authority considers phase 2 to be a continuation of the success of the generation phase (phase 1).

It has been mentioned that phase 1 of e-invoicing in Saudi Arabia achieved positive results. Also, phase 1 implementation raised consumer protection and created awareness among taxpayers.

ZATCA implemented phase 1 of Saudi e-invoicing w.e.f 4th December 2021, which mandated VAT-registered taxpayers in Saudi to:

• Avoid handwritten invoices 
• Stop issuing computer-generated invoices using text editing software
• Adding QR code and other data in the invoice
• Use a ZATCA-compliant e-invoicing solution
• Archive e-invoices and related Credit or Debit Notes (CDNs)