ZATCA Announced Wave 5 Under Phase 2 of Saudi Arabia e-Invoicing

The Saudi Arabian tax authority Zakat, Tax and Customs Authority (ZATCA) announced the targeted taxpayers for the fifth wave under phase 2 (integration phase). It clarified that the taxpayers registered under Saudi Value Added Tax (VAT) registered with more than SAR 100 million turnover during 2021 or 2022 shall fall under wave 5 of phase 2.

Hence, wave 5 applicable taxpayers should integrate their ERP/POS with the Fatoora portal from 1st December 2023.

ZATCA requires the below additional requirements to comply with phase 2:

• Integration of e-invoicing solutions with the Fatoora portal
• Including additional fields in the invoice format
• Following specific format to issue electronic invoices

ZATCA announced they would implement phase 2 of e-invoicing in waves and inform the concerned taxpayers minimum of six months before the integration date.

Accordingly, till now, ZATCA notified the below waves:

• Wave 1 under phase 2: VAT-registered taxpayers in Saudi with more than SAR 3 billion turnover in 2021 must start integration from 1st January 2023.
• Wave 2 under phase 2: Saudi taxpayers 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: Businesses 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.
• Wave 4 under phase 2: Taxpayers having more than SAR 150 million and less than SAR 250 million in 2021 or 2022 must integrate with the Fatoora portal starting 1st December 2023.

ZATCA successfully implemented phase 1 of Saudi e-invoicing from 4th December 2021. It mandated the taxpayers registered under Saudi VAT to:

• Avoid handwritten invoices 
• Stop issuing invoices through text editing software
• Onboard with a ZATCA-compliant e-invoicing solution
• Include QR code and other requirements in invoices
• Store e-invoices and related Credit or Debit Notes (CDNs)