ZATCA Announced Wave 17 Under Phase 2 of Saudi Arabia e-Invoicing

On 1^st November 2024, the Zakat, Tax and Customs Authority (ZATCA) announced the seventeenth wave under phase 2 of Saudi e-invoicing. It clarified that Value Added Tax (VAT) registered businesses with turnover more than SAR 2.5 million during 2022 or 2023 fall under wave 17 of phase 2.

Accordingly, applicable taxpayers must integrate their e-invoicing solutions with the Fatoora platform by 1st July 2025.

ZATCA mentioned that phase 2 requires additional requirements such as:

• Integrating e-invoicing solutions with the Fatoora portal
• Including additional fields in the invoice
• Issuing e-invoices in the ZATCA format

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

Accordingly, ZATCA had announced the following waves till now:

• Wave 1 under phase 2: Businesses registered under KSA VAT whose turnover was more than SAR 3 billion in 2021 must integrate with Fatoora from 1st January 2023.
• Wave 2 under phase 2: Saudi VAT-registered businesses 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 businesses registered under VAT 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 with a turnover of more than SAR 150 million and less than SAR 250 million in 2021 or 2022 shall integrate with ZATCA starting from 1 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 with effect from 1 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: Businesses 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.
• Wave 10 under phase 2: KSA VAT registered taxpayers whose turnover was between SAR 25 million and SAR 30 million in 2022 or 2023 must integrate with the Fatoora portal w.e.f 1st June 2024.
• Wave 11 under phase 2: KSA VAT registered taxpayers whose turnover was between SAR 15 million and SAR 25 million in 2022 or 2023 must integrate with the Fatoora portal w.e.f 1st June 2024.
• Wave 12 under phase 2: KSA VAT registered taxpayers whose turnover was between SAR 10 million and SAR 15 million in 2022 or 2023 must integrate with the Fatoora portal w.e.f 1st December 2024.
• Wave 13 under phase 2: KSA VAT registered taxpayers whose turnover was between SAR 7 million and SAR 10 million in 2022 or 2023 must integrate with the Fatoora portal w.e.f 1st January 2025.
• Wave 14 under phase 2: KSA VAT registered taxpayers whose turnover was between SAR 5 million and SAR 7 million in 2022 or 2023 must integrate with the Fatoora portal w.e.f 1st February 2025.
• Wave 15 under phase 2: KSA VAT registered taxpayers whose turnover was between SAR 4 million and SAR 7 million in 2022 or 2023 must integrate with the Fatoora portal w.e.f 1st March 2025.
• Wave 16 under phase 2: KSA VAT registered taxpayers whose turnover was between SAR 3 million and SAR 4 million in 2022 or 2023 must integrate with the Fatoora portal w.e.f 1st April 2025.

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.

It has been mentioned that phase 1 of e-invoicing in Saudi Arabia achieved positive results. Implementation of Phase 1 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)
• Use a ZATCA-compliant e-invoicing solution
• Including QR code and other data in the invoice
• Store e-invoices and related Credit or Debit Notes (CDNs)