Today let’s talk about ZATCA E-invoicing and all the things that Saudi Arabian businesses should keep in mind.
The Zakat, Tax and Customs Authority (ZATCA) is rolling out the second and most critical phase of e-invoicing, known as the Integration Phase. This is a mandatory digital shift for businesses in Saudi Arabia. Understanding the rules is essential for compliance and continuous operations.
ZATCA continually announces new waves, lowering the threshold to include more businesses. For example, recent waves have extended the mandate to businesses with taxable revenue thresholds as low as SAR 1 Million
Criteria:
You must integrate with ZATCA Phase II if your business is VAT-registered and you meet the revenue threshold for an announced wave, in this case it is all businesses with 1M+ turnover.
Critical Step:
Businesses must monitor official ZATCA announcements to identify their specific wave and corresponding deadline. ZATCA typically notifies the affected taxpayer groups at least six months before their integration date.
What Integration means?
integration means connecting your Electronic Invoicing Solution (EGS) directly with ZATCA’s FATOORA platform to enable:
- Tax Invoices (B2B): Clearance (real-time validation) by ZATCA before the invoice is sent to the buyer.
- Simplified Tax Invoices (B2C): Reporting of the invoice data to ZATCA within 24 hours of issuance.
Mandatory Technical Requirements
Integrated Solution: You must use an ERP, accounting software, or a ZATCA-compliant solution that can generate e-invoices.
Digital Security: Your system must issue a Cryptographic Stamp (a unique digital signature) on every invoice to guarantee its authenticity and integrity.
Unique Identifier: Every invoice must contain a UUID (Universal Unique Identifier).
PDF/A-3 Format: Invoices must be generated in this special PDF format with a machine-readable XML file embedded inside (for automation and machine validation).
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