ZATCA e-invoicing in Saudi Arabia: phases, requirements and how Phase 2 integration works

E-invoicing (Fatoora) is ZATCA's requirement that VAT-registered businesses in Saudi Arabia issue tax invoices, credit notes and debit notes in a structured electronic format through a compliant electronic solution. It runs in two phases: Phase 1 (generation), enforced from 4 December 2021, and Phase 2 (integration), enforced in waves from 1 January 2023, which connects your invoicing system to ZATCA's platform.

Key facts at a glance

• Who must comply: all resident VAT-registered taxpayers, and any party issuing tax invoices on behalf of a VAT-registered supplier (Phase 1).
• Phase 1 — generation: since 4 December 2021, invoices must be issued and stored through a compliant electronic solution with the required fields, including a QR code on simplified invoices.
• Phase 2 — integration: since 1 January 2023, rolled out in waves by taxpayer group. ZATCA notifies each taxpayer of its wave at least six months in advance.
• Not an e-invoice: a paper invoice that has been scanned, photographed or copied into electronic form.
• Two invoice types: a tax invoice is usually issued business-to-business (B2B); a simplified tax invoice is usually issued to consumers (B2C), such as a POS receipt.

What Phase 2 changes for a shop

• Device onboarding. Each invoicing unit (for example each POS) is registered with ZATCA and receives a cryptographic stamp identifier (CSID).
• Signed invoices. Every invoice carries a unique identifier (UUID), a hash that chains it to the previous invoice, and a cryptographic stamp.
• Clearance vs reporting. Standard tax invoices (B2B) are cleared: sent to ZATCA and stamped before you share them with the buyer. Simplified tax invoices (B2C) are reported to ZATCA within 24 hours of being issued.
• Required fields. Seller VAT number, invoice type, date and time, VAT breakdown, and for B2B the buyer's VAT number and address.

Phase 2 integration steps (how to link your POS with ZATCA)

1. Confirm your wave and deadline from ZATCA's notification to your business.
2. Confirm your solution supports Phase 2. Ask the vendor to show a cleared B2B invoice and a reported B2C invoice live, and check whether the provider appears in ZATCA's Solution Providers Directory.
3. Onboard every invoicing unit. From the Fatoora portal, generate a one-time code and enter it in your solution so each device receives its CSID.
4. Test before the deadline. Issue test standard and simplified invoices and confirm each one is cleared or reported without errors.
5. Go live and monitor. Watch rejected or failed invoices daily and fix the cause (missing buyer data, wrong VAT category, expired certificate).

Five things to check this week

1. Does your POS show a ZATCA status (cleared / reported / failed) for each invoice?
2. Can it keep issuing signed invoices offline and report them later within the 24-hour window?
3. Are credit notes linked to the original invoice?
4. Are your seller VAT number and address printed correctly in Arabic?
5. Who is responsible when ZATCA rejects an invoice — and do you get alerted?

Saudia Incorp handles onboarding, signing, reporting and clearance and shows the status of each invoice on the ZATCA screen. Book a demo to see it with your own products.