ZATCA Announced Wave 4 Under Phase 2 of Saudi Arabia e-Invoicing

Zakat, Tax and Customs Authority (ZATCA) announced the targeted taxpayers in the fourth wave to implement phase 2 Saudi Arabia e-invoicing. It clarified that the Value Added Tax (VAT) registered taxpayers whose turnover was more than SAR 150 million and less than SAR 250 million during 2021 or 2022 would fall under wave 4 of phase 2 (integration phase).

Hence, wave 4 applicable taxpayers should start integrating their e-invoicing solutions with the Fatoora portal from 1st November 2023.

ZATCA stated that phase 2 requires additional requirements such as:

• Integrating your e-invoicing solutions with the Fatoora portal
• Including additional fields in the invoice as per rules and regulations
• Issuing electronic invoices in the specified format

ZATCA announced they would implement phase 2 of e-invoicing in waves by informing the applicable taxpayers minimum of six months before the integration date.

Accordingly, till now, ZATCA notified the below waves:

• Wave 1 under phase 2: Taxpayers registered under Saudi VAT whose turnover is more than SAR 3 billion in 2021 must start integration from 1st January 2023.
• Wave 2 under phase 2: VAT-registered taxpayers in Saudi having a turnover of more than SAR 500 million and less than SAR 3 billion in 2021 must integrate with ZATCA’s Fatoora portal starting 1st July 2023.
• Wave 3 under phase 2: Taxpayers registered under KSA VAT with more than SAR 250 million and less than SAR 500 million in 2021 or 2022 shall integrate with the Fatoora portal from 1st October 2023.

ZATCA stated that the integration phase of e-invoicing is an extension of the economic development and digital transformation taking place in Saudi. Also, ZATCA considers phase 2 as a continuation of the success story that began with the generation phase (phase 1) of e-invoicing.

ZATCA mentioned in the wave 4 announcement that phase 1 of Saudi e-invoicing achieved positive results. It raised the consumer protection level in the country, and the authority has also witnessed great awareness among taxpayers while implementing the generation phase. 

ZATCA successfully implemented phase 1 of Saudi e-invoicing from 4th December 2021, which obliged all KSA VAT-registered taxpayers to:

• Stop generating handwritten invoices 
• Avoid computer-generated invoices through text editing software
• Adopt a ZATCA-compliant e-invoicing solution
• Comply with QR code and other requirements
• Store e-invoices and related Credit or Debit Notes (CDNs)