ZATCA E-Invoicing Guide: Fatoora Integration from Wave 24 Onward

E-invoicing in Saudi Arabia (the "Fatoora" project) applies in two phases: the generation phase, which began on 4 December 2021, and the integration phase with the Fatoora platform, which began on 1 January 2023 and is rolled out in waves, according to the Zakat, Tax and Customs Authority (ZATCA). If your business is VAT-registered, Phase 1 already applies to you, and you move to Phase 2 on the date ZATCA gives for your wave, which it announces at least six months in advance.

Key takeaways

• Phase 1 (generation): issue and store invoices electronically through a compliant solution; a scanned paper invoice is not an e-invoice.
• Phase 2 (integration): XML invoices sent to the Fatoora platform; tax invoices are cleared before being shared with the buyer, and simplified invoices are reported within 24 hours.
• ZATCA defines each wave by a threshold of VAT-able revenue and notifies targeted businesses at least six months before the integration date.
• Wave 24 covered businesses with revenue above SAR 375,000 and a deadline of 30 June 2026; Wave 25 covers those above SAR 187,500 with a deadline of 1 February 2027.
• Integration means onboarding your invoicing solution on the Fatoora portal with a one-time password so it receives its cryptographic stamp certificate.

What is e-invoicing and who must comply?

ZATCA defines e-invoicing as converting the issuing of paper invoices and notes into an electronic process that allows invoices, credit notes and debit notes to be exchanged and processed in a structured electronic format between buyer and seller. It is not a PDF sent by email, but an invoice generated and stored in a structured format through a compliant electronic solution.

Who is in scope?

According to ZATCA's detailed e-invoicing guideline, every taxable person resident in the Kingdom must comply, as must a customer or third party issuing a tax invoice on their behalf. Non-residents are not required to issue e-invoices. The obligation covers every transaction that requires a tax invoice, plus credit and debit notes.

What does not count as an e-invoice?

A paper invoice converted to electronic form by copying, scanning or similar is not an e-invoice, and neither are scanned paper notes. Any information in the human-readable version of a tax invoice must also be in Arabic, although a translation may be added.

Why it matters to you as a buyer too

This is not only the seller's concern. ZATCA's guideline links a VAT-registered buyer's right to deduct input VAT to supplier invoices that are electronically generated and meet the requirements. In the integration phase, the guideline notes that an uncleared tax invoice is not eligible for VAT deduction. Compliance has therefore become something your business customers ask about before working with you.

Phase 1 vs Phase 2: what is the difference?

ZATCA's guideline explains that a business keeps following Phase 1 requirements until its wave's integration date, and can update its existing solution to meet Phase 2 rather than replace it. The guideline also allows businesses to adopt Phase 2 requirements voluntarily before their wave date.

How integration waves work and how to learn your wave

Phase 2 does not apply to everyone on the same day. For each wave ZATCA sets a criterion — a threshold of VAT-able revenue in specified years — and then notifies the businesses that meet it of their integration date. ZATCA's roll-out page states that it will notify taxpayers of their Phase 2 wave at least six months in advance.

How does the notification reach you?

Watch three sources: notifications from ZATCA through the contact channels registered on your tax account, your account on ZATCA's e-services portal, and wave announcements on ZATCA's roll-out phases page. If your revenue is close to an announced threshold, start preparing before the notice arrives; six months pass quickly when they include choosing a solution, training staff and updating POS devices.

ZATCA Wave 24

According to ZATCA's announcement of 26 September 2025, the twenty-fourth wave covered all taxpayers whose VAT-able revenue exceeded SAR 375,000 in any of 2022, 2023 or 2024, who had to integrate their solutions with Fatoora by 30 June 2026 at the latest. If your business was included and has not finished integrating, the right move is to complete it as soon as possible, because delay does not remove the obligation.

Wave 25

On 24 July 2026 ZATCA announced the criteria for the twenty-fifth wave: all taxpayers whose VAT-able revenue exceeded SAR 187,500 in any of 2022, 2023, 2024 or 2025, with integration due by 1 February 2027. The falling threshold means Phase 2 is gradually reaching smaller businesses, so early preparation pays off even if no message has reached you yet. Details are in the ZATCA Wave 25 guide.

Phase 2 technical requirements

Phase 2 requires your invoicing system to "talk" to the Fatoora platform directly. Here are the key components in plain language:

XML format and invoice template

Invoices are generated in XML following ZATCA's implementation standard, which is built on UBL tags, and can be shared with customers in a printed or electronic readable format. If you share a PDF, it must be PDF/A-3 with embedded XML, according to the FAQs in ZATCA's guideline.

Clearance and reporting

• Clearance: every tax invoice is sent to the platform in real time before being shared with the buyer; ZATCA validates it, adds its stamp and returns it, and it is not valid until then.
• Reporting: a simplified invoice is issued to the customer immediately, then uploaded in XML to the platform within 24 hours of issue.

QR code and cryptographic stamp

Simplified invoices carry a QR code the customer can verify with ZATCA's app and are sealed with a cryptographic stamp generated by the invoicing solution. The stamp is a technical digital signature on the invoice hash, proving it came from a registered solution and was not altered afterwards.

Cryptographic Stamp Identifier (CSID)

Every invoice-generating unit, such as a POS device or accounting system, needs a unique cryptographic stamp identifier issued when it is onboarded on Fatoora. The solution uses this certificate to stamp simplified invoices and access reporting, and it is renewed or revoked from the same portal.

Prohibited functions

According to the detailed guideline, a solution in the integration phase must not allow: access without a username and password or biometrics, operating with a default password, missing user activity logs, or editing or deleting invoices and notes after issue. Corrections are made with a credit or debit note, not by changing the original invoice.

What if the system fails or the connection drops?

ZATCA's guideline dedicates a section to failure scenarios, and the general idea is simple:

• Accepted with warnings: no immediate action, but review the warning and fix the cause in later invoices.
• Rejected: correct the error based on the platform's response and resubmit.
• ZATCA servers overloaded or down: the solution keeps retrying until the platform responds.
• Your internet or device fails: notify ZATCA through its specified channel, keep trading, and resubmit once service returns.

The guideline requires businesses to notify ZATCA of any incident preventing invoice generation and of recovery, and to resume clearance or reporting of all pending invoices once the solution works again. Keep evidence of your attempts, such as the system's submission logs.

Tax vs simplified invoices: when to use each

A tax (standard) invoice is usually issued in business-to-business and government transactions, includes the buyer's details and VAT number, and goes through clearance before sharing. A simplified invoice is usually issued to individual consumers, generally without buyer details, and is reported within 24 hours. One business may need both — a restaurant selling to walk-in customers daily and catering for a company monthly. For a detailed comparison with examples, read simplified vs standard invoices under ZATCA.

Fines and the fines-cancellation initiative

ZATCA applies penalties to e-invoicing violations that escalate by type and repetition: some start with a warning and a period to correct, others carry a financial fine from the first occurrence, and penalties rise with repetition. Because the detailed schedule covers many violation types, we compiled it with examples in the ZATCA e-invoicing fines guide.

What does the fines-cancellation initiative cover?

On 29 June 2026 ZATCA announced the Minister of Finance's decision to extend the "Cancellation of Fines and Exemption of Financial Penalties" initiative by six months, from 1 July to 31 December 2026. According to ZATCA's announcement, it covers penalties for late registration, late payment, late filing of returns and VAT return corrections, provided the taxpayer is registered, files outstanding returns and pays the principal tax due. It excludes tax-evasion penalties, fines under Article 45 of the VAT Law, fines paid before the initiative took effect, and penalties on returns due after 30 June 2026. The announcement does not mention e-invoicing violations, so do not treat the initiative as a reason to delay Fatoora integration. Details are in the fines-exemption initiative guide.

Steps to integrate with the Fatoora platform

ZATCA's detailed guideline sets out specific steps for connecting compliant solutions to the Fatoora API. This practical table combines them with the preparation that comes first:

After integration: what to monitor

1. In the first weeks, review rejected invoices and those returned with warnings daily, and fix the cause, not just the invoice.
2. Make sure simplified invoices are reported within 24 hours, especially from devices that may work offline.
3. Never edit an issued invoice; issue a linked credit or debit note.
4. Update user permissions when staff join or leave.
5. Track stamp certificate validity and renew from the portal before expiry.

Choosing a compliant solution and avoiding common mistakes

Many systems claim to be "ZATCA compliant". Ask any provider these questions before signing:

• Does it support real-time clearance of tax invoices and 24-hour reporting of simplified invoices?
• Does the provider handle Fatoora onboarding and the stamp certificate, or will you?
• Does it cover all your issuing points: the till, the online store, bookings and manual B2B invoices?
• How does it handle connectivity loss, and how does it show rejected invoices and the reasons?
• Does it send the invoice to the customer automatically in a readable format, keep an archive and provide VAT reports?

What to prepare before contacting a provider

• Your commercial registration, VAT number and ZATCA e-services login for the authorised user.
• A list of every branch, POS and system issuing invoices today, and who uses them.
• A rough split of your sales between consumers and businesses, to size simplified vs tax invoices.
• Your business address and details exactly as registered with ZATCA, since any mismatch shows on invoices.
• Your wave notice, if received, and its deadline.

This information cuts setup time and makes provider comparisons reflect your real situation rather than a generic demo.

Common mistakes

• Integrating only some issuing points: if the till is connected but the online store issues invoices from another tool, that one needs integrating too.
• Skipping testing: errors found after going live are harder to fix.
• Waiting for the notice to start: it eats into your six months.
• Relying on exemption initiatives: the announced initiative concerns registration, payment and return penalties, not Fatoora integration.
• Editing or deleting invoices: prohibited in a compliant solution; corrections use notes.

How Watily helps

Watily's e-invoicing system is compliant with Phase 2 requirements and designed for businesses without a technical team:

• XML invoices with cryptographic stamp, sequential counter and a QR code on every invoice.
• Tax and simplified invoices, with direct API integration to Fatoora to submit invoices and receive responses in real time.
• The Watily team handles integration and verification with the platform; activation usually takes about 24 hours after you provide your commercial registration and VAT number.
• Invoices sent to customers automatically on WhatsApp as a PDF with the QR code, with an optional payment link for credit invoices.
• VAT reports and an invoice archive, within plans that also include the WhatsApp API, booking, loyalty cards and an online store, starting at 49 SAR per month excluding VAT on the pricing page.

Whether your wave notice has arrived or you expect it soon, preparing early spares you a last-minute rush before the deadline. Activate ZATCA-compliant e-invoicing with Watily or explore the other systems from the Watily home page.

Frequently Asked Questions

What is the difference between Phase 1 and Phase 2 of e-invoicing?

Phase 1 requires invoices to be issued and stored electronically through a compliant solution and began on 4 December 2021. Phase 2 adds technical requirements and integration with the Fatoora platform, rolled out in waves since 1 January 2023.

How do I find out my Fatoora integration wave?

ZATCA notifies targeted businesses of their wave at least six months before the integration date. Watch ZATCA's notifications, your tax account and the wave criteria published on its website.

Who was included in Wave 24?

All taxpayers whose VAT-able revenue exceeded SAR 375,000 in any of 2022, 2023 or 2024. The integration deadline was 30 June 2026.

Does the fines-cancellation initiative cover e-invoicing violations?

ZATCA's announcement extending the initiative to 31 December 2026 mentions penalties for late registration, payment, filing and return corrections, and does not mention e-invoicing violations. Do not rely on it to delay integration.

What is the difference between clearance and reporting?

Clearance applies to tax invoices, which are sent to the platform and returned cleared before being shared with the buyer. Reporting applies to simplified invoices, which are issued to the customer immediately and uploaded to the platform within 24 hours.

Can I keep using my current system?

Yes, if it is updated to meet Phase 2 requirements, according to ZATCA's guideline. It must support the required format, cryptographic stamping, clearance and reporting, and cover all your invoice-issuing points.