Compliance
Saudi Arabia’s E-Invoicing Wave 25: What Businesses Need to Know and Do
Saudi Arabia’s ZATCA launches Wave 25 of E-Invoicing Phase Two—here’s how to assess criterion, deadlines, and compliance actions to avoid penalties.
By NomadicTax Research Team • 5-8 min read • August 24, 2026
## What is E-Invoicing “Phase Two” in Saudi Arabia?
Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) has been rolling out **Phase Two (Integration Phase)** of its Electronic Invoicing (“Fatoora”) regulation in incremental waves—requiring qualifying taxpayers to integrate their invoice-generation systems with ZATCA’s platform, comply with specific technical standards, and include additional invoice data fields. ([zatca.gov.sa](https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/Roll-out-phases.aspx?lang=de&utm_source=openai))
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## Key Update: Wave 25 Criteria & Deadlines
- **Criteria**: Taxpayers with VAT-subject revenues exceeding **SAR 187,500** during any of years **2022-2025** are included in Wave 25. ([zatca.gov.sa](https://zatca.gov.sa/en/MediaCenter/News/Pages/Wave25-E-invoicing.aspx?utm_source=openai))
- **Deadline**: All entities in Wave 25 must be fully integrated by **1 February 2027**. ([zatca.gov.sa](https://zatca.gov.sa/en/MediaCenter/News/Pages/Wave25-E-invoicing.aspx?utm_source=openai))
- **Requirements**: Integration means connecting the taxpayer’s invoicing solution to ZATCA’s Fatoora platform, issuing invoices in the required format, with additional fields like relevant metadata and compliance with technical specs. ([zatca.gov.sa](https://zatca.gov.sa/en/MediaCenter/News/Pages/Wave25-E-invoicing.aspx?utm_source=openai))
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## Who is Affected?
- **Small and medium businesses** whose revenues exceed SAR 187,500 in any assessment year between 2022-2025.
- Businesses currently under Phase One (Generation Phase) but not yet integrated.
- VAT agents and providers of invoicing or POS systems—to ensure their tools comply with Fatoora specs.
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## What to Do Now: Action Plan
1. **Identify revenue status**: review your VAT-liable supplies in each of years 2022 through 2025 to see if you hit SAR 187,500.
2. **Assess current invoicing solution**: determine if your system can connect to Fatoora; evaluate whether you comply with required fields, format, and technical/IT infrastructure.
3. **Plan integration timeline**: build or procure integration during the months ahead; aim to complete all testing well before 1 February 2027.
4. **Train staff & update workflows**: invoice issuance, returns, archiving, audit trails—ensure internal teams understand new fields, timing, format.
5. **Monitor ZATCA updates and guidance**: phases may come with technical specifications, training materials, or adjustment windows. Stay informed via the official portal.
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## Compliance Risks & Incentives
- **Penalties** for non-compliance** can include fines for failing to issue e-invoices, or failing to integrate on time—and could lead to broader regulatory scrutiny.
- **Enforcement is increasing**: ZATCA recently conducted over **61,000 inspection visits** in Q2 2026, uncovering failures related to electronic invoicing and VAT collection. ([zatca.gov.sa](https://zatca.gov.sa/en/MediaCenter/News/Pages/Inspection-61k-Visits-Q2-2026.aspx?utm_source=openai))
- **Digital readiness** will increasingly correlate with tax compliance. Early adopters benefit from smoother operations and lower risk of audit issues.
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## Example Scenarios
- A retailer whose sales in 2022 were SAR 200,000 but jumped to SAR 300,000 in 2025 must comply with Wave 25 integration by Feb 1 2027.
- A small shop with revenues of SAR 150,000 throughout 2022-2025 stays in Phase One but may get included in later waves.
- A software provider for POS systems can adjust its product line to include Fatoora-compliant tools, offering integration services to clients and gaining competitive edge.
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## Takeaway for Digital Nomads and Cross-Border Businesses
Digital nomads working with Saudi clients should invoice according to Phase Two standards if their clients are subject to ZATCA requirements and provide services on a VAT-liable basis. For cross-border entities, invoice integrations might require additional localization or addressing multiple tax jurisdictions.
**Bottom line:** Wave 25 is real, with revenue thresholds and a fixed deadline. Assess where you stand, act ahead, and avoid penalties by integrating early and doing internal readiness work.