ZATCA's e-invoicing program, Fatoora, has two phases. Phase 1 (generation) has applied since 4 December 2021 and requires VAT-registered businesses to issue and store invoices electronically through a compliant solution. Phase 2 (integration) applies in waves by revenue and connects your system to the Fatoora platform. Wave 25 covers businesses whose VAT-subject revenue exceeded SAR 187,500 in any year from 2022 to 2025, with an integration deadline of 1 February 2027. Check your notification from ZATCA.
- zatca e-invoicing phases explained
- zatca phase 2 integration waves
- difference between phase 1 and phase 2 fatoora
- is e-invoicing mandatory for online stores in saudi arabia
- zatca clearance vs reporting
What is ZATCA e-invoicing (Fatoora), and what are its phases?
ZATCA e-invoicing requires VAT-registered businesses in Saudi Arabia to issue and store invoices electronically in a structured format, instead of paper or editable files. The Zakat, Tax and Customs Authority runs it under the name Fatoora, in two phases: generation, then integration.
The goal is not to complicate traders' lives but to make invoices standardized, reliable and verifiable, which reduces manipulation and simplifies VAT returns. If you sell online, nearly every order produces an invoice, so e-invoicing sits at the heart of your store, not on the side.
| Item | Phase 1: Generation | Phase 2: Integration |
|---|---|---|
| Start | 4 December 2021 for all registered businesses | In waves by revenue |
| Idea | Issue and store invoices electronically | Connect your invoicing system to the Fatoora platform |
| Format | Electronic invoice from a compliant solution | Structured XML with a cryptographic stamp |
| QR code | Required on simplified invoices | Required, tied to the stamped invoice data |
| Link with ZATCA | No direct connection | Clearance or reporting through the platform |
Phase 1 (generation): what does it mean in practice?
Since 4 December 2021, every VAT-registered business has had to issue its invoices and credit and debit notes electronically through a compliant technical solution, and store them electronically. This phase applies to you today if you are registered, whatever your Phase 2 wave.
- Required: an e-invoicing solution that issues invoices with the required fields and stores them.
- Required: a QR code on the simplified invoices you issue to consumers.
- Not acceptable: handwritten invoices, or Word and Excel files that can be edited after issue.
- Not acceptable: deleting or editing an invoice after issue; corrections are made with a credit or debit note.
Phase 2 (integration): clearance and reporting
In Phase 2, your invoicing system connects to ZATCA's Fatoora platform. It starts with onboarding your solution on the platform to obtain an identifier and cryptographic stamp; the platform then handles the two invoice types differently:
- Usually business-to-business (B2B) invoices
- The invoice goes to the Fatoora platform first
- The platform validates and clears it
- Only then do you share it with the buyer
- Business-to-consumer (B2C) sales, such as store orders
- The invoice goes to the customer immediately with a QR code
- It is then reported to the platform within the time ZATCA sets
- No approval is needed before the customer gets it
What changes technically?
- Invoices are issued in structured XML according to the specifications ZATCA publishes.
- Each invoice carries a cryptographic stamp and a chain linking it to the previous one, so nothing can be removed from the middle.
- Communication with the platform happens through secure APIs.
- Each solution or device that issues invoices must be onboarded on Fatoora before integration.
Which wave are you in? Waves 23, 24 and 25
Phase 2 does not apply to everyone at once. Since 2023, ZATCA has selected businesses in waves based on their VAT-subject revenue in reference years, announcing each wave at least 6 months ahead and notifying the businesses included directly. The most recent announced waves:
| Wave | VAT-subject revenue threshold | Integration deadline |
|---|---|---|
| Wave 23 | Above SAR 750,000 | 31 March 2026 |
| Wave 24 | Above SAR 375,000 | 30 June 2026 |
| Wave 25 | Above SAR 187,500 in any year from 2022 to 2025 | 1 February 2027 |
Wave 25 matters a lot to small stores because its threshold is relatively low. We cover what to do before the deadline in the Wave 25 checklist.
Standard tax invoice or simplified invoice: which, and when?
Most online stores sell to consumers, so they issue simplified invoices. But if a business customer buys from you, such as a company ordering gifts for its staff, it may ask for a tax invoice with its VAT number. Your system should support both.
| Item | Standard tax invoice | Simplified invoice |
|---|---|---|
| Customer | Usually a business (B2B) | An individual consumer (B2C) |
| Buyer details | Buyer's name, VAT number and address | Detailed buyer data not required |
| In Phase 2 | Cleared before sharing | Reported after issue |
| QR code | Per the specifications | Required |
| Example | A company buys 50 gift boxes | A customer orders a perfume from the store |
What about refunds and cancellations?
In online stores, refunds are part of daily work. When a customer returns an item or you cancel an order after its invoice was issued, do not delete or edit the invoice; issue a credit note that references the original invoice and shows the refunded amount and the related VAT. In Phase 2 the note is treated like the invoice itself: cleared or reported depending on its type. So make the refund button in your admin panel issue the note automatically instead of relying on staff to remember.
To understand VAT itself, when to register and how to show prices, read VAT for online sellers in Saudi Arabia.
How does your store or app comply in practice?
- 1Know your status
Are you VAT-registered? Have you received a wave notification? What is your deadline?
- 2List every place invoices are issued
Your store, app, in-shop POS and manual invoices for companies. All of them must comply.
- 3Choose your invoicing solution
Built into your store, or a compliant invoicing provider connected to it by API. Make sure it supports clearance and reporting.
- 4Onboard on Fatoora
Complete onboarding and obtain the stamp in the sandbox first, then in production.
- 5Test the hard cases
Partial refunds, cancellation after payment, an order for a company with a VAT number, and losing connection to the platform.
- 6Go live before the deadline
Do not wait for the last week; leave room to fix any rejections or data errors.
Add an e-invoicing system to my store that follows ZATCA's requirements: a simplified invoice with a QR code issued automatically for every paid order, and a standard tax invoice option when the customer enters their business name, VAT number and address. Calculate 15% VAT per line and show VAT-inclusive totals. Do not allow editing or deleting an invoice after issue, and make refunds issue a credit note linked to the original invoice. Add an admin page listing invoices with their status and an export option. Show me the plan before building.
Try it in FanannCommon e-invoicing mistakes
- Assuming Phase 2 is far away: the Wave 25 threshold is low, and many small stores may fall within it.
- Forgetting side channels: the store complies, but WhatsApp orders are invoiced by hand in an editable file.
- Editing instead of issuing a note: corrections are made with a credit or debit note, never by changing the original.
- Relying on hearsay: your real deadline is in ZATCA's notification, not in a forwarded message.
An e-invoice is not paperwork after the sale; it is part of the sale itself.
Your next step: sign in to ZATCA's portal and check for any wave notification, then review how your store issues invoices today. For payments and receipts inside your app, read How to add payments to your app.
Key takeaways
- Phase 1 has applied since 4 December 2021: electronic invoices from a compliant solution, no handwritten invoices.
- Phase 2 connects your system to the Fatoora platform and rolls out in waves announced at least 6 months ahead.
- Standard tax invoices (B2B) are cleared before being shared; simplified invoices (B2C) are reported.
- Wave 25: VAT-subject revenue above SAR 187,500 in any year from 2022 to 2025, deadline 1 February 2027.
- The final word is the notification you receive from ZATCA, not what others say.
Frequently asked questions
What is the difference between Phase 1 and Phase 2 of ZATCA e-invoicing?
When does Phase 2 apply to me?
Is e-invoicing mandatory for online stores in Saudi Arabia?
Do store orders need a tax invoice or a simplified invoice?
Can I edit an e-invoice after issuing it?
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