The Zakat, Tax and Customs Authority (ZATCA) has announced the criteria for selecting taxpayers targeted in the Twenty-Fifth Wave (Wave 25) for the Implementation of the “Integration Phase” of E-invoicing in Saudi Arabia. According to the announcement, Wave 25 includes all taxpayers whose revenues subject to VAT exceeded SAR 187,500 during any of the years 2022, 2023, 2024, or 2025. ZATCA will notify all targeted taxpayers in this wave to integrate their e-invoicing solutions with the Fatoora Platform no later than February 1, 2027. The Integration Phase (Phase Two) builds upon the Generation Phase (Phase One) launched on December 4, 2021, which required taxpayers to cease handwritten invoices and adopt compliant e-invoicing solutions with QR codes. Phase Two imposes additional requirements: integration with ZATCA’s Fatoora platform, issuance of e-invoices in a specific standardized format, and inclusion of additional mandatory fields. ZATCA emphasized that the rollout of Phase Two will occur gradually in waves, with future waves announced at least six months prior to their integration dates. This phased approach is part of the Kingdom’s economic development and digital transformation under Vision 2030, following the successful implementation of Phase One which enhanced consumer protection and achieved high taxpayer awareness and compliance.
Key Takeaways
- Revenue Threshold and Look-Back Period for Wave 25: The eligibility criterion for Wave 25 is a VAT-revenue threshold of SAR 187,500 in any of the four years from 2022 to 2025. This look-back period captures businesses that have crossed the threshold at any point in recent years, ensuring a broad base for the Integration Phase. Taxpayers must assess their historical VAT revenues across these years to determine if they fall within Wave 25. The relatively low threshold compared to previous waves indicates ZATCA’s intention to expand e-invoicing integration to a wider segment of the economy.
- Integration Deadline and Technical Requirements: Targeted taxpayers must integrate their e-invoicing solutions with the Fatoora platform by February 1, 2027. This integration requires technical capability to transmit invoice data in real-time or near-real-time to ZATCA’s platform, adhere to a prescribed invoice format (likely based on UBL or similar standard), and include additional data fields beyond those required in Phase One. Businesses should engage with certified e-invoicing solution providers early to ensure their systems can meet these specifications.
- Phased Rollout and Future Wave Announcements: ZATCA’s commitment to announcing future waves at least six months in advance provides businesses with a predictable timeline for preparation. This transparency allows taxpayers to plan system upgrades, staff training, and budget allocation. The phased approach also enables ZATCA to monitor adoption, address technical challenges, and refine the platform based on feedback from earlier waves, contributing to a more stable nationwide implementation.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement