ZATCA E-Invoicing (Fatoora) Phase 2: What Saudi Businesses Need to Know

What is e-invoicing in Saudi Arabia?

ZATCA (the Zakat, Tax and Customs Authority) requires businesses to issue invoices electronically through compliant solutions. The programme is known as Fatoora and has two phases: the Generation Phase and the Integration Phase.

What changes in Phase 2?

In the Integration Phase, taxpayers must:

• integrate their e-invoicing solution with ZATCA's Fatoora platform
• issue e-invoices in the specified format
• include additional required fields in the invoice

Who is included? The waves explained

ZATCA selects taxpayers in waves based on their revenue subject to VAT and notifies each targeted taxpayer. For example, ZATCA announced that wave 24 includes all taxpayers whose VAT-able revenue exceeded SAR 375,000 in 2022, 2023 or 2024, with integration required by 30 June 2026. Check ZATCA notifications and your own revenue history to confirm your wave.

How to prepare

1. Confirm your wave and deadline with ZATCA.
2. Check whether your ERP or accounting system supports Phase 2, or choose a compliant solution.
3. Onboard and integrate the solution with Fatoora.
4. Test invoices and credit and debit notes end-to-end.
5. Train your finance team and update internal procedures.

Common mistakes

• Leaving integration until the last weeks before the deadline
• Assuming an existing system is compliant without testing
• Incomplete customer data (for example, VAT numbers) on B2B invoices

How Luba helps

Luba Global Ventures helps you choose or configure a ZATCA-compliant ERP, integrate it with Fatoora, and keep your VAT registration, returns and bookkeeping compliant.