Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) has made e-invoicing mandatory for all businesses as part of its Vision 2030 digital transformation goals. Non-compliance can lead to heavy fines (up to SAR 50,000), making it crucial for companies to adopt the right solutions.

This guide covers everything you need to know about ZATCA e-invoicing, including Phase 1 & 2 requirements, implementation steps, and how Zatify can help your business stay compliant.

What is E-Invoicing in Saudi Arabia?

E-invoicing (Fatoorah) is the digital generation, issuance, and storage of tax invoices as per ZATCA’s regulations. It replaces traditional paper invoices with a secure, standardized electronic format.

Key Features of ZATCA E-Invoicing:

✔ QR Code – Every invoice must include a ZATCA-compliant QR code.
✔ Real-Time Reporting (Phase 2) – Invoices must be reported to ZATCA’s Fatoorah portal in real time.
✔ Tamper-Proof – Invoices must be cryptographically signed to prevent alteration.
✔ Archival – Businesses must store invoices for 5+ years.

ZATCA E-Invoicing Phases

1. Phase 1 (Generation Phase)

  • Applies to all VAT-registered businesses in KSA.

  • Requires:

    • Digital invoice generation (PDF/XML)

    • Basic QR code (containing seller/buyer VAT numbers, invoice amount, timestamp)

    • No system integration needed yet

2. Phase 2 (Integration Phase – Rolling Mandate)

  • Requires real-time reporting to ZATCA via API integration.

  • Applies in waves based on annual revenue:

    • Wave 1 (Jan 2023) – Businesses with SAR 3B+ revenue

    • Wave 2 (July 2023) – Businesses with SAR 500M+ revenue

    • Wave 3 (Jan 2024) – Businesses with SAR 250M+ revenue

    • Wave 4 (July 2024) – All remaining taxpayers

Aramco Vendors Note: If you supply to Saudi Aramco, you must comply early. Zatify’s Aramco Vendor Compliance Service ensures you meet their stricter deadlines.

How to Comply with ZATCA E-Invoicing

Step 1: Compliance Assessment

Before implementation, businesses must:
✔ Check if they fall under Phase 1 or Phase 2.
✔ Identify gaps in their current invoicing system.
✔ Ensure their ERP/accounting software supports ZATCA requirements.

🔗 Get a Free Compliance Check from Zatify

Step 2: System Integration

Businesses in Phase 2 must:
✔ Integrate their ERP (SAP, Oracle, Zoho) with ZATCA’s Fatoorah portal.
✔ Implement Continuous Transaction Controls (CTC) for real-time reporting.
✔ Generate advanced QR codes with hashing.

🔗 Zatify’s E-Invoicing Integration Solutions

Step 3: Testing & Go-Live

✔ Submit sample invoices to ZATCA for validation.
✔ Train staff on e-invoicing processes.
✔ Monitor for errors post-implementation.

Why Choose Zatify for ZATCA Compliance?

With 100+ successful implementations, Zatify provides:
✅ End-to-End Compliance – From assessment to integration.
✅ ERP Integration – Works with SAP, Oracle, Microsoft Dynamics, Zoho.
✅ Aramco Vendor Support – Specialized solutions for Aramco suppliers.
✅ Ongoing Monitoring – Ensures no compliance gaps.

📌 Need Help?
🔹 ZATCA Phase 2 Compliance
🔹 ERP Integration Services
🔹 Aramco Vendor E-Invoicing