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ZATCA announces the 16th wave under Phase 2 of Saudi Arabia’s e-invoicing system. VAT registered businesses that have an annual turnover exceeding SAR 3 million by 2022 or 2023 fall under wave 16. Businesses must incorporate their e-invoicing systems to the Fatoora platform prior to April 1st 2025.

Key requirements of phase 2

ZATCA’s Phase 2 brings the following enhancements to the electronic invoicing process:
  • Integration with Fatoora platform to make invoicing easier.
  • Extra invoice fields to provide greater clarity and to ensure compliance.
  • Mandatory use of ZATCA compliant electronic invoice formats.
ZATCA ensures that businesses are informed at least six months prior to the integration deadlines to each of the waves.

Timeline of E-invoicing waves under phase 2

Below is a brief overview of the waves that were previously announced that will be followed by Wave 16:
  1. Wave 1: (From January 1st 2023): Businesses that have a turnover of greater than SAR 3 billion by 2021.
  2. Wave 2:  (From July 1st 2023): Companies with a turnover between SAR 500 million and SAR 3 billion by 2021.
  3. Wave 3: (From October 1st 2023):
Companies that have turnover that is between SAR 250 million and SAR 500 million by 2021 or 2022.
  1. Wave 4: (From November 1st 2023): Businesses with an annual turnover between SAR 150 million and SAR 250 million. The years are 2021 or 2022.
  1. Wave 5: (From 1 December 2023): Businesses that have a turnover of SAR 100 million and SAR 150 million by 2021 or 2022.
  2. Wave 6: (From January 1st 2024):Companies with a turnover between SAR 70 million and SAR 100 million by 2021 or 2022.
  3. Wave 7: (From February 1st 2024): The annual turnover of businesses should be between SAR 50 million and  SAR 70 million by 2021 or 2022.
  4. Wave 8: (From March 1st 2024): The turnover should be between SAR 40million and SAR 50 million by 2021 or 2022.
  5. Wave 9: (From 1 June 2024): Businesses with turnover of between SAR 30 million and SAR 40 millions in 2021 or 2022.
  6. Wave 10: (From 1 June 2024): Businesses with turnover of between SAR 25 million to SAR 30 million by 2022 or 2023.
  7. Wave 11: (From 1 June 2024): Businesses with turnover of between SAR 15 million to SAR 25 million by 2022 or 2023.
  8. Wave 12: (From 1 December 2024): Businesses with turnover of between SAR 10 million to SAR 15 million by 2022 or 2023.
  9. Wave 13: (From January 1st 2025): Businesses with turnover between SAR 7 million and SAR 10 million by 2022 or 2023.
  10. Wave 14: (From February 1st 2025): Businesses with turnover of between SAR 5,000,000 and SAR 7 million by 2022 or 2023.
  11. Wave 15: (From March 1st 2025): The turnover should be between SAR 4,000,000 and SAR 5 million by 2022 or 2023.

The impact of phase 2

Phase two of Saudi Arabia’s e-invoicing program is an important step in the country’s journey to digital transformation. It’s intended to:
  • Promote economic development.
  • Improve transparency and protection of consumers.
  • Tax compliance is simplified for companies.

Success of phase 1

First phase was announced the day of December 4 2021 it brought important advantages:
  • Handwritten invoices are not acceptable.
  • Introduced e-invoicing solutions that are ZATCA compliant.
  • Mandated to include QR codes as well as other information on invoices.
  • Better tax compliance and greater awareness of taxpayers.

Conclusion

ZATCA continues its mission to develop the tax system in Saudi Arabia. Businesses need to implement ZATCA-compliant electronic invoice systems and meet deadlines. Wave 17 will also contribute to a more efficient, transparent and regulated business environment.