Saudi e-invoicing (ZATCA Phase 2) explained

What Phase 2 is

ZATCA's e-invoicing has two phases: generation, known as Phase 1, and integration, known as Phase 2. In the integration phase your invoicing software is connected to ZATCA's FATOORA platform, so invoices reach ZATCA as they are issued.

Integration happens in waves. Each wave is defined by VAT revenue and gets its own deadline, and ZATCA gives at least six months' notice of a new wave.

Invoices meet ZATCA in one of two ways:

• Clearance: a standard tax invoice, issued to another business, is sent to ZATCA, which checks and stamps it before it goes to the buyer.
• Reporting: a simplified tax invoice, typically a sale to a consumer, is reported to ZATCA after it is issued, and carries a QR code.

Who must integrate, and by when

Wave 24's threshold of SAR 375,000 equals the mandatory VAT registration threshold, and Wave 25's SAR 187,500 equals the voluntary one. Wave 25 was announced on 24 July 2026.

The Wave 23 details come from an adviser's summary (EY); Waves 24 and 25 come from ZATCA's own announcements.

What your company needs

1. Check your VAT revenue for 2022 to 2025 against the wave thresholds, and look out for ZATCA's notice.
2. Make sure you can sign in to your company's FATOORA portal: you request the one-time codes (OTP) there.
3. Use invoicing software that can integrate: it creates each invoice as structured data with the QR code and a cryptographic stamp, sends standard invoices for clearance and reports simplified ones.
4. Onboard each e-invoicing unit with an OTP from the FATOORA portal, then test with real documents.
5. Train the people who issue invoices, credit notes and debit notes, and agree who deals with a rejected invoice.

Choosing software

ZATCA publishes a directory of e-invoicing solution providers. ZATCA calls it indicative and not legally binding: a provider is listed after a qualification programme (an application, a demonstration to ZATCA and a signed memorandum of cooperation), and a listing is not an approval of the software.

Questions worth asking any provider:

• Does it clear standard invoices and report simplified ones from the same system you invoice from?
• Does it handle credit notes and debit notes?
• Can you see which invoices were cleared, reported, rejected or not yet sent?
• In which environment was it tested: ZATCA's developer sandbox, simulation or production?
• Does it print tax invoices in Arabic and English?

Where records may be kept

ZATCA's FAQ from August 2021, which may be out of date, says a cloud or data centre outside Saudi Arabia is acceptable if the data can be reached from the branch in the Kingdom. Some advisers read the rules as requiring the data to be kept in Saudi Arabia.

Separately, SDAIA published draft amendments to the implementing regulations of the Personal Data Protection Law, open for consultation from 6 October to 5 November 2026, which would require controllers to store personal data in the Kingdom while still allowing transfers abroad. They are a draft: ask your adviser what applies to you.

This website makes no data-residency claim for DynamoOS. Before you sign, we tell you in writing where your data is kept.

How DynamoOS handles it

ZATCA Phase 2 e-invoicing is built into Dynamo Finance and tested against ZATCA's developer sandbox: on 2 October 2026 the sandbox accepted all six e-invoice document types from DynamoOS with no errors. That is a sandbox test, not a certification, and there is no production clearance yet.

• Standard tax invoices are cleared and simplified invoices reported, with credit and debit notes, the QR code and the cryptographic stamp.
• Each e-invoicing unit is onboarded with the OTP from your FATOORA portal.
• Point of sale receipts are simplified tax invoices with the QR code, reported from Dynamo Finance.
• Tax invoices print in Arabic and English side by side.
• The Saudi Arabia pack that adds all this is included at no charge with every plan.

E-invoicing goes live for your company after your own FATOORA onboarding.