A complete guide for corporate taxpayers in Saudi Arabia on the Phase 2 e-invoicing (FATOORA) wave rollout plan, including ZATCA’s implementation timelines, wave-by-wave compliance requirements, and best practices for readiness.
📌 Introduction
Saudi Arabia’s Phase 2 E-Invoicing rollout, also known as the Integration Phase of the FATOORA project, requires taxable businesses to integrate their e-invoicing systems with the Zakat, Tax and Customs Authority (ZATCA) platform. This phase is being implemented in waves, with each wave covering a specific group of taxpayers based on their VAT turnover. Corporate taxpayers must be aware of their assigned wave and the deadlines to avoid penalties and ensure smooth compliance.
📊 Phase 2 E-Invoicing Rollout Table
Below is the detailed table of ZATCA’s Phase 2 E-Invoicing rollout, summarising the applicable turnover thresholds, notification timelines, and mandatory compliance dates for each wave:
| Wave | Targeted Taxpayers | VAT Turnover Threshold | Notification Period | Integration Deadline |
|---|---|---|---|---|
| Wave 1 | Large enterprises | ≥ SAR 3 billion (2021) | January 2022 | January 1, 2023 |
| Wave 2 | High-value taxpayers | ≥ SAR 500 million (2021) | June 2022 | July 1, 2023 |
| Wave 3 | Medium-large taxpayers | ≥ SAR 250 million (2021 or 2022) | October 2022 | October 1, 2023 |
| Wave 4 | Mid-size taxpayers | ≥ SAR 150 million (2021 or 2022) | January 2023 | November 1, 2023 |
| Wave 5 | Mid-range taxpayers | ≥ SAR 100 million (2021 or 2022) | March 2023 | December 1, 2023 |
| Wave 6 | Lower-mid taxpayers | ≥ SAR 70 million (2021 or 2022) | May 2023 | January 1, 2024 |
| Wave 7 | Lower turnover businesses | ≥ SAR 50 million (2021 or 2022) | July 2023 | February 1, 2024 |
| Wave 8 | Small-medium taxpayers | ≥ SAR 40 million (2021 or 2022) | September 2023 | March 1, 2024 |
| Wave 9 | Small taxpayers | ≥ SAR 30 million (2021 or 2022) | November 2023 | April 1, 2024 |
| Wave 10 | Small businesses | ≥ SAR 20 million (2021 or 2022) | January 2024 | May 1, 2024 |
| Wave 11 | Smaller VAT payers | ≥ SAR 10 million (2021 or 2022) | March 2024 | June 1, 2024 |
| Wave 12 | Final low-turnover group | ≥ SAR 5 million (2021 or 2022) | May 2024 | July 1, 2024 |
Note: Future waves for VAT-registered taxpayers below SAR 5 million turnover will be announced by ZATCA in due course, with the last phases expected by end of 2026.
🛠️ Key Compliance Requirements for Phase 2
- Integrate invoicing systems with ZATCA’s FATOORA platform using APIs.
- Issue e-invoices in XML format with embedded QR codes.
- Include mandatory fields such as VAT registration number, timestamps, and unique invoice identifiers.
- Retain electronic copies of invoices for at least 6 years.
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⚠️ Common Challenges Faced by Taxpayers
- Not upgrading ERP or POS systems in time for integration deadlines.
- Incorrect VAT codes or missing mandatory invoice fields.
- Failure to generate real-time compliant invoices during sales.
- Insufficient staff training on e-invoicing processes.
💡 Best Practices to Ensure Smooth Compliance
- Start integration testing with ZATCA’s sandbox environment as soon as notified.
- Engage certified e-invoicing solution providers early in the process.
- Train finance and IT teams on compliance requirements and troubleshooting.
- Review ZATCA’s updated e-invoicing guidelines before each wave rollout.
✅ Conclusion
The Phase 2 e-invoicing rollout in Saudi Arabia is a major milestone in digital tax transformation. Corporate taxpayers must identify their assigned wave, adhere to ZATCA’s integration timelines, and implement robust compliance systems to avoid penalties. Early preparation is the key to ensuring a seamless transition into the new digital VAT era.
