# E-invoicing in Saudi Arabia (Fatoora): what Phase 2 means for your accounting system

> Saudi e-invoicing has two phases: generation, which began on 4 December 2021, then integration with the Fatoora platform in waves. Wave 25 covers entities whose VAT-subject revenue exceeded SAR 187,500 in any year from 2022 to 2025, with an integration deadline of 1 February 2027. Your system must issue invoices in the required format and send them to the platform.

Source: https://www.al-arjan.com/en/blog/zatca-e-invoicing-phase-2-saudi · العربية: https://www.al-arjan.com/ar/blog/zatca-e-invoicing-phase-2-saudi.md

Author: Al-Arjan — Published 2026-11-11

## What is e-invoicing (Fatoora)?

E-invoicing in the Kingdom is supervised by the Zakat, Tax and Customs Authority (ZATCA). It means the tax invoice is issued and stored electronically in a structured format — not as a Word file, an image or a handwritten sheet.

It was rolled out in two phases: the generation and storage phase, which began on 4 December 2021, then the integration phase, which connects the entity’s system to the Fatoora platform. Phase 2 is applied in waves, and ZATCA notifies each wave at least six months before its date.

## Who does Wave 25 cover, and when is the deadline?

On 24 July 2026 ZATCA announced the Wave 25 criteria: all entities whose VAT-subject revenue exceeded SAR 187,500 during 2022, 2023, 2024 or 2025. Targeted entities must integrate with the Fatoora platform by 1 February 2027 at the latest ([ZATCA announcement](https://zatca.gov.sa/en/MediaCenter/News/Pages/Wave25-E-invoicing.aspx)).

In practice this threshold brings most VAT-registered small and medium entities into Phase 2 or close to it. ZATCA notifies each targeted entity directly, so watch your email and your account on the ZATCA portal.

## What must your accounting or POS system do in Phase 2?

According to ZATCA’s detailed e-invoicing guidelines, the system needs to: issue the invoice in structured XML, add the cryptographic stamp and QR code, onboard with the Fatoora platform to obtain the stamp certificate, then send invoices to the platform.

A standard tax invoice (business to business) is sent to the platform for clearance before it reaches the buyer, and a simplified invoice (to a consumer, such as a POS receipt) is reported to the platform within 24 hours of issue. The system must also handle credit and debit notes and invoices the platform rejects.

### Standard versus simplified invoice in Phase 2
| Item | Standard tax invoice | Simplified tax invoice |
|---|---|---|
| For | Between businesses (B2B) | To consumers (B2C), e.g. POS |
| Platform handling | Clearance before reaching the buyer | Reported within 24 hours |
| QR code | Required | Required |
| Cryptographic stamp | Required | Required |

## A ready-made system or a custom system with Fatoora integration?

If your operations are simple, a certified ready-made accounting package may be enough. If you run your own internal system — inventory across warehouses, special pricing, or branches with permissions — it is better to build Fatoora integration into that system, directly or through an integration provider, instead of entering invoices twice.

Before signing with any company, ask: how will onboarding and the stamp certificate be handled? What happens to a rejected invoice? Does the POS keep working offline and report later within the window? Who updates the system when the specification changes? The trade-off is in [ready-made versus custom software](https://www.al-arjan.com/en/blog/custom-vs-ready-software).

## How does Al-Arjan handle e-invoicing on Saudi projects?

Tax-invoice requirements and Fatoora integration are a core item in the analysis of any [accounting and POS system](https://www.al-arjan.com/en/services/pos-accounting) or [ERP](https://www.al-arjan.com/en/services/erp) we build for a Saudi company, and the project scope states how each requirement will be met and who pays any integration provider’s fees. [Al-Arjan in Saudi Arabia](https://www.al-arjan.com/en/saudi-arabia) covers the rest of what we offer in the Kingdom.

## Frequently asked questions

### When did e-invoicing start in Saudi Arabia?

The generation and storage phase began on 4 December 2021, then the Fatoora integration phase began in waves.

### What is the Wave 25 revenue threshold?

SAR 187,500 of VAT-subject revenue in any year from 2022 to 2025, with integration due by 1 February 2027.

### Is a QR code on the invoice enough?

Not in Phase 2: it also needs the structured format, the cryptographic stamp and submission to the Fatoora platform.

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