ZATCA Wave 25: Prepare Your Business for E-Invoicing by February 2027

ZATCA Announces Wave 25: Smaller Saudi Businesses Now in the Compliance Queue

On July 24, 2026, the Zakat, Tax and Customs Authority (ZATCA) officially published the criteria for Wave 25 of Phase 2 — the Integration Phase — of Saudi Arabia's e-invoicing mandate. This is a landmark announcement for Saudi SMBs: the annual revenue threshold has been cut in half, from SAR 375,000 (Wave 24) to just SAR 187,500. If your business generated more than SAR 187,500 in VAT-subject revenue in 2022, 2023, 2024, or 2025, you are almost certainly in Wave 25, with a hard integration deadline of February 1, 2027 to connect your systems to ZATCA's Fatoora Platform.

Wave 25 follows close on the heels of Wave 24, whose compliance deadline expired on June 30, 2026. Full enforcement — including penalties of SAR 5,000 to SAR 50,000 — has been in effect since July 1, 2026. For smaller Saudi businesses that have been watching the compliance rollout from the sidelines, Wave 25 is the clear signal that e-invoicing integration is now a requirement for virtually every VAT-registered enterprise in the Kingdom.

Who Is Affected by Wave 25?

Wave 25 covers all taxpayers whose VAT-subject revenues exceeded SAR 187,500 in any year from 2022 to 2025. Key facts to understand:

• Revenue threshold: SAR 187,500+ in any single year from 2022 through 2025
• Integration deadline: February 1, 2027
• Notification process: ZATCA will send official notices to affected taxpayers at least six months before the deadline
• Sectors affected: All — retail, food and beverage, professional services, healthcare, logistics, education, and more

An important nuance: your business does not need to have exceeded the SAR 187,500 threshold every year. Crossing it in even one of the four reference years (2022, 2023, 2024, or 2025) brings you into Wave 25 scope. Many small cafes, boutiques, freelancers, and service providers who assumed Phase 2 integration applied only to large enterprises now find themselves directly in scope. With over 1.7 million active commercial registrations in Saudi Arabia, Wave 25 is on track to be the broadest compliance push in the history of the Fatoora program.

Do not evaluate your eligibility based only on your current 2026 revenue. What matters is whether you exceeded SAR 187,500 in any one of the four preceding years. Review your VAT return records for 2022, 2023, 2024, and 2025 now to determine your Wave 25 status.

What Phase 2 Integration Actually Requires

Phase 2 — the Integration Phase — is substantially more demanding than Phase 1, which simply required generating and storing e-invoices in the correct format. Under Phase 2, your business system must be technically integrated with ZATCA's Fatoora Platform in real time. The requirements include:

• Direct API connection with ZATCA's Fatoora Platform, operating in real time
• Cryptographic digital signatures on every invoice, each carrying a unique UUID
• QR code embedding and previous-invoice hash chaining within every document
• B2B/B2G clearance: invoices must be cleared by ZATCA before being sent to the buyer
• B2C e-reporting: simplified invoices must be reported to ZATCA within 24 hours of issuance
• Auditable digital records maintained and accessible for tax authority review

In May 2026, ZATCA issued the third version of its e-invoicing controls and technical specifications. Businesses running legacy accounting software or paper-based invoicing will need significant system upgrades to meet these requirements. The runway to February 2027 may sound comfortable, but technical implementation, API testing, sandbox validation, and certification all consume real time and resources. Businesses that delayed in Waves 22, 23, and 24 faced intense last-minute pressure — do not repeat that mistake with Wave 25.

Penalties for Non-Compliance: SAR 5,000 to SAR 50,000

The grace period that softened penalties during the early rollout of ZATCA Phase 2 ended officially on June 30, 2026, alongside the Wave 24 deadline. Since July 1, 2026, ZATCA has been enforcing the full penalty schedule against non-compliant businesses. The same regime will apply to Wave 25 businesses from February 2027:

• First offense: SAR 5,000
• Repeat offense: SAR 15,000
• Severe or persistent non-compliance: up to SAR 50,000

Beyond monetary fines, non-compliant businesses risk detailed tax audits and heightened regulatory scrutiny. With Saudi Arabia's weekly POS transaction volumes surpassing SAR 13 billion in July 2026 — representing hundreds of millions of individual transactions — ZATCA has the data infrastructure to identify non-compliant businesses efficiently by cross-referencing registered enterprises against their Fatoora integration status. Every transaction that bypasses the platform integration is a documented liability sitting on your balance sheet.

How Watily Solves This

Watily's ZATCA e-invoicing integration is purpose-built for Saudi small and medium businesses that need to achieve full compliance without assembling an in-house IT team. Watily manages the complete technical stack of Fatoora Platform integration so you can concentrate on running your business rather than deciphering technical specifications.

• Instant Fatoora Platform integration — no technical expertise required
• Automatic cryptographic signatures and QR codes generated on every invoice
• Separate B2B clearance and B2C e-reporting workflows, handled automatically
• Full compliance with ZATCA Technical Specification Version 3 (May 2026)
• Arabic-first support team with deep knowledge of Saudi compliance requirements
• Unified dashboard to manage all invoices, clearances, and tax reports in one place

Whether you run a cafe, a retail shop, a consultancy, or a healthcare clinic, Watily makes ZATCA Wave 25 compliance straightforward. Take your first step now: visit Watily's ZATCA e-invoicing page and schedule a free consultation with a compliance specialist who understands exactly what your business needs to be fully integrated before February 2027.

Do not wait for ZATCA's official Wave 25 notification letter — by the time it arrives, months of your preparation window will already be behind you. Register with Watily today, connect your business to the Fatoora Platform, and face Wave 25 with complete confidence. Full compliance before February 1, 2027 means zero penalty exposure — and the freedom to focus entirely on growing your Saudi business in the Kingdom's expanding digital economy.