What are the Saudi e-invoicing phases?
Published
The summary first
| Phase 1 - Generation | Phase 2 - Integration | |
|---|---|---|
| Start | 4 December 2021 | From 1 January 2023, in waves |
| Applies to | All resident taxable persons | By revenue wave |
| Core requirement | Generate and store invoices electronically via a compliant system | Connect the invoicing system directly to the Fatoora platform |
| Format | Electronic invoice with mandatory fields | XML or PDF/A-3 with embedded XML |
| QR code | Mandatory on simplified invoices | Extended with cryptographic fields |
| Authority involvement | No direct link | Clearance of standard invoices before sharing; reporting of simplified ones |
| Technical elements | - | UUID, cryptographic stamp, digital signature, tamper-evident sequencing |
Phase 1 in practice
Since 4 December 2021, the handwritten invoice and the Word-file invoice have been over. What is required:
- Invoices and notes generated through a compliant invoicing system that prevents tampering (no deletion, no post-issue editing).
- The mandatory fields for both invoice types.
- A QR code on simplified tax invoices.
- Electronic storage of invoices.
What Phase 2 added
Direct integration with the authority through the Fatoora platform - and with it, a change to the invoice's journey itself:
- Standard invoices (B2B/B2G): submitted to the platform for clearance before being shared with the buyer. An uncleared invoice is not a valid invoice.
- Simplified invoices (B2C): issued to the customer immediately, then reported to the platform within a short window (24 hours under the applicable requirements).
- The format is mandatorily XML or PDF/A-3 with embedded XML, carrying a UUID, cryptographic stamp, digital signature, and hash-chained sequential numbering that makes deletion or insertion detectable.
The wave system
The authority did not switch everyone to Phase 2 at once. Integration rolls out in waves by taxable revenue in reference years, largest first. Announced waves have reached progressively smaller bands: recent examples include a wave for businesses above SAR 750,000 with an integration deadline of 31 March 2026, and a wave for those above SAR 375,000 in 2022, 2023, or 2024 with a deadline of 30 June 2026 - meaning the mandate has effectively reached the VAT registration threshold itself.
Applied to Al-Waha: annual revenue of roughly SAR 1.84 million means it exceeded 375,000 in the reference years, falls inside announced waves, and its deadline has passed. It should be integrated with Fatoora today - and if it is not, it is late on a current obligation, not preparing for a future one.
How you know your wave: the authority notifies covered businesses at least six months before their integration deadline, and the final reference is ZATCA's notice and portal, not any secondhand table.
Common mistakes
| Mistake | Effect |
|---|---|
| Treating the wave notice as informational and deferring | The integration deadline is a statutory obligation; missing it is a violation |
| Buying a "Phase 1 compliant" system as the wave approaches | A full reinvestment months later |
| Assuming simplified invoices sit outside Phase 2 | They are covered, via the reporting path instead of clearance |
| Skipping the simulation environment before going live | Your first rejected invoice happens in production |
Frequently asked questions
Did Phase 2 replace Phase 1?
No - it builds on it. Generation, storage, and field requirements remain; integration, formats, and cryptographic elements are added.
A business founded today complies with which phase?
Phase 1 requirements from the moment it is in scope, and integration per the authority's provisions for new taxpayers - the reference is ZATCA's notice and portal.
What happens to a standard invoice that is not cleared?
It is not shared with the buyer as a valid invoice. The rejection reason is fixed and it is resubmitted.