What does ZATCA Phase 2 require for Saudi e-invoicing?
Effective: 2023-01-01 · Authority: ZATCA (Zakat, Tax and Customs Authority)
ZATCA Phase 2 (Integration Phase) requires VAT-registered businesses to integrate their e-invoicing systems with the FATOORA clearance portal via ZATCA's API. Invoices must be cleared by ZATCA before delivery to buyers (clearance model for B2B) or reported within 24 hours (simplified tax invoices). Phase 2 rolled out in waves from January 2023.
How does the Phase 2 wave rollout work?
ZATCA notifies groups of businesses 6 months before they must comply with Phase 2. Waves are determined by annual revenue and sector. Wave 1 covered businesses with revenue above SAR 3 billion (January 2023). Subsequent waves include progressively smaller businesses. By 2026, all VAT-registered businesses should be covered.
Frequently Asked Questions
- What is the difference between clearance and reporting in ZATCA Phase 2?
- Clearance applies to standard tax invoices (B2B): the invoice must be submitted to FATOORA and cleared before delivery to the buyer. Reporting applies to simplified tax invoices (B2C): invoices must be reported to FATOORA within 24 hours of issuance. The buyer receives the invoice directly without waiting for clearance.
- What happens if FATOORA is unavailable during clearance?
- ZATCA provides offline clearance procedures for system unavailability. Businesses can use pre-generated cryptographic stamps for offline operation and submit for clearance when connectivity is restored. ZATCA specifies maximum offline periods and catch-up submission procedures.
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