ZATCA Phase 2 Integration: Waves, Deadlines, and What "Approved Software" Really Means

If ZATCA has notified your business that it falls within an integration wave — or your VAT-subject revenue is anywhere near SAR 187,500 — this page covers what Phase 2 integration actually involves, the deadlines that apply, and how to judge whether a solution (including the one you already run) genuinely meets the requirements.

Phase 1 vs Phase 2, in one minute

Phase 1 — Generation. In force since 4 December 2021 for all resident taxpayers. Invoices and their credit/debit notes must be generated and stored through a compliant electronic solution. Handwritten invoices, Word and Excel files stopped being acceptable then — for everyone, regardless of size.

Phase 2 — Integration. Began 1 January 2023 and is rolled out in waves. It adds three requirements on top of Phase 1: integrating your e-invoicing solution with ZATCA’s Fatoora platform, issuing invoices in a specific format, and including additional fields in the invoice.

The practical difference: under Phase 1 your invoice was a matter between you and your customer. Under Phase 2 it passes through ZATCA’s systems.

The waves: where the thresholds stand

Two things to read out of that table. The threshold halved between waves — Wave 25 reaches a large population of small businesses that have never integrated with anything. And one year is enough: exceeding the threshold in any single year of the window puts you in scope.

ZATCA notifies targeted taxpayers directly, at least six months before their integration date. But absence of a letter is not proof of absence from scope — if your numbers are near the line, check all four years.

Clearance and reporting: the two flows your invoices will follow

Once integrated, not all invoices are treated the same way:

• Standard tax invoices (B2B) follow the clearance model. The invoice is submitted to Fatoora and cleared before it is delivered to the buyer — it is not valid until ZATCA has cleared it.
• Simplified tax invoices (B2C) follow the reporting model. The invoice is handed to the customer immediately, then reported to ZATCA within 24 hours of generation.

If you sell to both businesses and consumers, you need both flows — and a solution that picks the right invoice type from the customer’s data rather than leaving that judgement to whoever is behind the counter.

“ZATCA approved software” — what that phrase is worth

It is the most-searched English phrase in this space, and it deserves a careful answer.

What matters legally is specific: your solution must meet ZATCA’s published requirements, and integrate with Fatoora once your wave applies. Those capabilities are verifiable. The word “approved” in an advertisement is not the verification — and it does not move the obligation: compliance sits with your business, and registration with ZATCA is yours to complete; no vendor can do it on your behalf.

So instead of hunting for a blessing, ask any vendor — including your current one — these questions:

1. Does it generate the QR code on simplified invoices automatically?
2. Does it require the buyer’s VAT registration number on standard invoices before issuing?
3. Does it refuse to delete or amend an issued invoice, correcting through linked credit/debit notes instead?
4. Does it build the Phase 2 format and additional fields without manual work?
5. Does it handle clearance and reporting against Fatoora, including the 24-hour rule?
6. What happens offline — does issuing continue and reporting resume automatically?
7. Who manages the company’s cryptographic certificates and their renewal?
8. When Fatoora rejects an invoice, do you see the rejection reason verbatim?

A yes to all eight is what “compliant” means in practice. Hesitation on question 4 or 5 means you are looking at an invoicing template with a nicer interface.

Already running Tally, Zoho, Odoo or another ERP?

A meaningful share of businesses in the Kingdom run international ERPs, and a generic invoice out of an ERP is not automatically a compliant Saudi e-invoice. That does not mean you must replace your ERP — it means the eight questions above go to your ERP vendor, about their Saudi Arabia configuration specifically. If the answers come back no — or “with customisation, quoted separately” — the usual path is a dedicated e-invoicing solution running alongside the ERP, handling generation, format and Fatoora integration, while the ERP keeps doing what it does well.

The mistake to avoid is discovering this in the final weeks before your wave’s deadline. Previous waves showed the crunch concentrates at the end — and that what actually delays businesses is incomplete master data (customer VAT numbers above all), not the technical integration itself.

The penalties, honestly

The enforcement picture is firmer than most vendor marketing suggests, but it is not designed to ambush you:

Fines are applied by violation type and repetition, and a violation recurring more than 12 months after it was discovered counts as new — starting with a warning again.

Where eFatura fits

eFatura issues both invoice types with their required fields and QR codes, corrects through linked credit and debit notes, builds Phase 2 invoices in the required format, submits to the Fatoora platform, manages the company’s certificates and renewals, and surfaces rejection reasons verbatim so an invoice can be corrected and resubmitted. The interface and support run in English, Arabic and Turkish — relevant if your finance team and your accountant do not share a first language.

See plans and pricing or the full side-by-side limits. قارئ بالعربية؟ الدليل الأوسع متوفر هنا: ربط الفاتورة الإلكترونية مع هيئة الزكاة.

---

This guide is general information, not tax advice. Dates, thresholds and fines are sourced from the Zakat, Tax and Customs Authority and were verified on 27 August 2026. Check ZATCA’s e-invoicing pages for the latest announcements.