The ZATCA announces the launch of the 23rd wave of e-Invoicing integration.
ZATCA has released the official announcement of the second phase of e-invoicing implementation in Saudi Arabia (Wave 23). The new wave will be aimed at VAT registered companies that had turnover in excess of SAR 750,000 in 2022, 2023 or 2024. The announcement states that taxpayers impacted by the announcement need to connect their e-invoicing systems with the Fatoora portal by 31 March 2026.
This new wave brings Saudi Arabia’s digital transformation journey to a new level within the ZATCA compliant e invoicing framework. The project is to promote tax transparency, reduce the shadow economy and simplify financial reporting in the entire Kingdom.
Companies in areas like Retail, Wholesale, Electronics e invoicing, Healthcare, Manufacturing, and Professional Services are looking forward to setting up their systems for integration before the deadline.
Getting Ready for the Next Step in the E-Invoicing Journey with ZATCA Phase 2.
The Integration Phase (Phase 2) started on 1 January 2023 and will take place step by step in waves. Phase 2 would not only entail generating and storing e-invoices, but also link the businesses’ invoicing systems directly to ZATCA’s Fatoora platform.
Under this phase, businesses must:
- Connect invoicing software to Fatoora portal for automatic processing and updating.
- Create XML or PDF/A-3 format invoices that contain XML embedded.
- Add required invoice fields.
- Add QR codes to simplified invoices
- Apply cryptographic stamps and digital stamps.
- Ensure invoice archiving and compliance are kept up to date.
The technical requirements are intended to generate real-time validation and reporting of invoices among taxpayers and ZATCA.
Who is in Wave 23?
Wave 23 is for all VAT registered Saudi Arabia taxpayers who generate taxable revenues of more than SAR 750,000 in 2022, 2023 or 2024.
The businesses that are chosen under this wave will be notified directly by ZATCA. But, organizations should not wait till the last minute to start planning. By implementing early, companies can prevent operational disruptions and ensure enough time for sufficient testing prior to the integration deadline.
Verifying tax number Saudi Arabia registration information is also a crucial step for companies to ensure that all the records are kept up to date during onboarding and integration procedures.
For Wave 23:
For Wave 23, companies need to make sure that their ERP, POS, or accounting systems meet the technical requirements set by ZATCA.
Some of the significant technical requirements are:
Integrating with Fatoora Portal:
Clearing and reporting invoices in real time require the automatic integration of the business’s invoicing software with the Fatoora platform using APIs.
Structured Invoice Format:
Invoices should be sent in approved XML format, such as UBL 2.1 formatting rules.
QR Code and Cryptographic Stamp:
QR codes are needed for simplified invoices, and also the invoices need to have cryptographic signatures to verify authenticity and ensure they have not been altered.
Invoice Hash Chain:
To ensure that invoices are not altered or tampered with, the system needs to keep a sequencing and a hash chain.
Real-Time Validation:
Clearances/reports to ZATCA are done directly based on the category of the invoice.
ERP software that includes native ZATCA compliant e invoicing features is increasingly favored by companies to streamline compliance and minimize implementation complexity.
Now is the time to begin preparing for the new season of business:
There are compliance risks, operation disruptions or penalties for non-compliance to consider if the implementation is delayed. Companies that start the process early will have a few benefits, such as:
- Faster integration testing
- Reduced system downtime
- Better employee training
- Accurate invoice validation
Seamless integration with existing invoicing systems is key.
For businesses within the electronics e invoicing and retail industry, steadiness in integrations is particularly essential because of transactions and customer service.
XML formatting, cryptographic signing, and API integration are also cited as challenges in the community discussions of developers and ERP users for Phase 2 compliance.
How ERP Solutions Can Aid in ZATCA Compliance:
Modern ERP systems make implementing the requirements of Wave 23 easy by automating invoice creation, tax computations, and Fatoora integration.
A good ERP solution can assist businesses in:
- Automatically create invoices that comply with regulations.
- Have secure records of invoices
- In real-time, validate VAT data.
- Support real-time API communication
- Minimize manual invoicing errors
Make sure that you’re always compliant with the evolving rules and regulations.
Cloud ERP systems are gaining traction because of scalability and simpler regulatory changes in Saudi businesses.
The Future of Digital Compliance in Saudi Arabia:
Saudi Arabia is further advancing the transformation of its tax landscape into a full-fledged digital tax system with the rollout of Wave 23. ZATCA has continued to grow the integration of Phase 2 in businesses of varying revenue levels since the launch of Phase 1 in December 2021.
The scope for compliance is now expanding to mid-size businesses with lower revenue levels, when compared with previous waves like wave 15. The phased rollout will help to ease the transition across the country and give businesses time to get ready for integration.
In the ongoing journey towards achieving Saudi Arabia’s Vision 2030 objectives, e-invoicing is poised to become a pivotal enabler for transparency, efficiency, and digital governance.
Conclusion
ZATCA e-invoicing Wave 23 is a significant milestone for VAT registered Saudi businesses. All companies that had revenues of more than SAR 750,000 during 2022, 2023 or 2024 are required to be integrated with Fatoora portal by 31 March 2026.
Compliance readiness, ERP capabilities, and the businesses’ invoicing infrastructure should all be evaluated now so as to prevent any complications in the last minute. Not only does an e invoicing solution that is ZATCA compliant help you stay compliant, it also increases operational efficiency and demonstrates greater financial transparency.
FAQs
Wave 23 is the newest wave of the Saudi Arabia ZATCA phase 2 e-invoicing integration phase. It is applicable to VAT registered companies with gross income of SAR 750,000 or more in 2022, 2023 or 2024. By 31 March 2026 these businesses are required to integrate with the Fatoora platform.
Invoicing systems must be integrated with the Fatoora portal, and must be able to create invoices in approved XML formats, with QR codes and cryptographic stamps, and with hash chains, and with support for real-time validation and reporting of invoices.
ZATCA has authorized APIs and compatible invoicing software for businesses to integrate their ERP or accounting systems. To cater for the needs of many organizations, ERP providers with built-in ZATCA compliant e invoicing options are the choice that reduces the complexity of integration, invoice validation and continuous management of compliance.
