ZATCA announces the criteria for the fourth wave of e-Invoicing Phase 2
ZATCA E-Invoicing Phase 2 – Fourth Wave
The Zakat, Tax, and Customs Authority (ZATCA) has announced the criteria for businesses that will be included in the Fourth Wave of Phase 2 (Integration Phase) of Saudi Arabia's E-Invoicing (FATOORA) initiative. This phase continues the gradual rollout of mandatory integration between taxpayers' e-invoicing systems and the ZATCA platform to strengthen tax compliance and digital transformation.
According to ZATCA, the Fourth Wave officially begins on November 1, 2023. It applies to VAT-registered taxpayers whose revenues exceeded SAR 150 million during either 2021 or 2022. These businesses must integrate their compliant e-invoicing solutions with the FATOORA platform before the specified implementation deadline.
ZATCA informs targeted businesses at least six months before their required integration date, providing sufficient time to prepare and complete technical compliance.
– ZATCA
- 1. Fourth Wave Start Date: Phase 2 Fourth Wave becomes effective from November 1, 2023 for eligible VAT-registered businesses.
- 2. Eligibility Criteria: Businesses with annual revenues exceeding SAR 150 million during 2021 or 2022 are required to integrate their e-invoicing systems with the FATOORA platform.
- 3. Advance Notification: ZATCA provides at least six months' notice to targeted establishments before their mandatory integration deadline, allowing sufficient time for system upgrades and testing.
- 4. Phased Rollout: The Integration Phase is being implemented gradually in multiple waves, with revenue thresholds reduced over time to include a wider range of taxpayers.
The Integration Phase originally commenced on January 1, 2023, targeting businesses with revenues exceeding SAR 3 billion. The second wave, introduced on July 1, 2023, lowered the threshold to SAR 500 million, while the Fourth Wave further expanded compliance to businesses with revenues above SAR 150 million. This phased implementation ensures organizations have adequate time to adopt compliant e-invoicing solutions.
The first phase of Saudi Arabia's e-invoicing initiative, launched on December 4, 2021, required taxpayers to stop issuing handwritten or manually created invoices and instead generate electronic invoices through compliant systems. Phase 2 builds on this foundation by enabling secure integration with the ZATCA FATOORA platform, supporting real-time validation, improved transparency, and streamlined tax administration.
