The launch of Wave 24, which falls under Phase 2 of e-invoicing, is a significant achievement for businesses operating in Saudi Arabia towards digital tax compliance. With the new wave from the Zakat, Tax and Customs Authority, there are thousands of small and medium sized businesses that now will be subjected to a wider compliance. This is one of the widest waves of integration ever seen for SMEs.
For VAT registered companies in Saudi Arabia, the needs of ZATCA Wave 24 are now crucial. Companies that will qualify for the announced revenue will have to connect their invoicing systems with the Fatoora portal, and have all their invoices in accordance with the ZATCA compliant e invoicing regulations before the announced date.
What is ZATCA Wave 24?
Wave 24 is the second phase of Saudi Arabia’s e invoicing implementation, referred to as the Integration Phase. In this stage, the companies must link their invoicing solutions directly to the ZATCA’s Fatoora portal with the objective of validating and reporting the invoices in real time or in near-time.
Wave 24 will cover VAT registered taxpayers with revenues subject to VAT of more than SAR 375,000 in 2022, 2023 or 2024. All businesses in this wave are required to be fully integrated with Fatoora by June 30th, 2026.
The latest rollout significantly expands the scope of e invoicing for electronics in Saudi Arabia, as it now extends to a large portion of SMEs, retailers, service providers, freelance businesses and expanding start-ups nationwide.
The reasons Wave 24 is important to SMEs:
Previous waves focused primarily on larger companies and businesses that make more than $1 million a year. However, Wave 24 is a national priority for the SME sector with a major emphasis on smaller businesses.
The shift from manual invoicing to basic accounting systems will require many businesses to invest in comprehensive e-invoicing solutions that can interact with the Fatoora portal.
This shift brings about a number of benefits for SMEs, not just for compliance reasons:
- Faster invoice validation
- Improved tax transparency
- Reduced invoicing errors
- Better audit readiness
- Improved financial recordkeeping
- Improved digitalization capability
Meanwhile, companies who procrastinate will risk disruption of their operations and potential penalties.
During the second phase of integration, the following are key requirements:
Under the Integration Phase, businesses in Wave 24 are subject to various technical and compliance obligations.
Integration with the Fatoora Portal:
The most important requirement is that it be integrated directly with ZATCA’s Fatoora platform. The businesses have to have software that can properly send invoice data to the ZATCA in a secure way.
ZATCA Compliant Invoice Format:
The invoice is to be approved by the format, which is based on XML, and must contain the necessary fields required by ZATCA. For many invoices, there is a need for additional data fields and QR code functionality.
Secure Electronic Invoice Generation:
Hand written invoices or editable formats that do not comply with the standards should be eliminated in business. The approved systems should produce tamper-proof e-Invoices containing suitable archiving capabilities.
Real-Time Invoice Reporting:
Invoices may require clearance/reporting in Fatoora before finalization, as per the type of invoice.
For businesses, here are some tips on preparing for Wave 24:
It is advisable for companies to start getting ready well in advance of the June 2026 deadline. Last minute waiting could lead to technical and operational issues.
Assess current ERP/Accounting Software:
The first step for businesses is to check if they already have an invoicing system that meets the requirements of ZATCA Phase 2. Otherwise, upgrading the ERP system or e-invoicing platform to meet compliance becomes a must.
Check the VAT Registration and Tax Data:
Correct information about the company should be reported in the invoicing system, including Tax number Saudi Arabia registration information.
Choose a Certified E-Invoicing Solution:
Choosing a trusted ZATCA compliant e-invoicing provider will make the integration easy, validate the invoices, generate QR codes and ensure XML compliant.
Perform System Testing Early:
Preparing for technical testing and onboarding with the Fatoora portal should start months before the deadline to ensure that there is no integration issue.
Compared to prior waves, the proportion of respondents who felt the way they did in Wave 24 were:
The primary focus of the earlier wave integration periods, prior to Wave 23, was on medium and large organizations where there was a greater taxable revenue. Wave 24 sets the threshold very low, at SAR 375,000 – one of the most inclusive waves launched by ZATCA to date.
The initiative highlights Saudi Arabia’s ongoing efforts to transform the country to a digital and tax modernized environment for businesses of all sizes nationwide.
The dawn of E-Invoicing in Saudi Arabia:
Saudi Arabia is continuing to develop its digital tax environment by incremental expansion of Fatoora. The more SMEs switch to the use of electronics e invoicing systems, the more they will be able to reap the benefits of automation, better compliance, and more transparent financial operations.
Wave 24 isn’t just another compliance deadline. It is a significant improvement in the direction of moving business transactions in the Kingdom to be fully digital.
Preparing now can save businesses from the stress of the last minute and provide them with operational benefits in the long term through the use of modern ERP and invoicing technologies.
Conclusion:
ZATCA Wave 24 represents one of the biggest compliance waves for SMEs on Saudi Arabia’s path to e-invoicing. The deadline for preparation of integrating with the Fatoora portal has been set to June 30, 2026, for VAT registered businesses with a turnover of more than SAR 375,000.
Preparing in advance and using a trustworthy ZATCA compliant e invoicing software can help companies navigate the process of complying with e invoicing regulations while also enhancing their efficiency, transparency, and digital readiness.
FAQs
The ZATCA Wave 24 corresponds to the 2nd wave of e-invoicing for the Kingdom of Saudi Arabia. It is for VAT registered businesses that have gross taxable income of more than SAR 375,000 for 2022, 2023 or 2024. Invoices must be linked to the Fatoora Portal by June 30, 2026 with these businesses.
The deadline for compliance of Wave 24 is June 30, 2026. Businesses that do not register on the Fatoora platform would risk penalties, audit scrutiny, issues with their invoices and fines for not complying with the Saudi VAT requirements.
To integrate, small businesses will have to use a certified ZATCA compliant e invoicing or ERP solution that will let them create and print an invoice in XML format, provide QR code along with connectivity through API and direct communication with Fatoora portal. Also, companies should be on boarded and tested, and be validated before the official deadline.
