FAQ Topic
KSA E-Invoicing
Frequently asked questions about ZATCA e-invoicing in Saudi Arabia.
Frequently asked questions
What is ZATCA e-invoicing?
ZATCA e-invoicing, also known as Fatoorah, is Saudi Arabia's electronic invoicing system introduced by the Zakat, Tax and Customs Authority (ZATCA). It replaces paper-based and manually generated invoices with structured electronic invoices that are created, stored, and exchanged through compliant electronic solutions. Under the system, an electronic invoice is generated in a structured format through an electronic solution. Simply scanning a paper invoice or converting it into a PDF does not make it an e-invoice. ZATCA e-invoicing applies to both tax invoices and simplified tax invoices, along with related credit and debit notes. The implementation is divided into two main phases. Phase 1 focuses on generating and storing compliant electronic invoices, while Phase 2 requires businesses to integrate their e-invoicing solutions with ZATCA's Fatoora platform. Businesses must therefore use an e-invoicing solution that meets ZATCA's technical, security, and invoice-format requirements. Platforms such as Complyance can help businesses manage compliant invoice generation and prepare their existing ERP or accounting systems for ZATCA integration. Key points ZATCA e-invoicing is also known as Fatoorah. It replaces paper and manually generated invoices with structured electronic invoices. PDF or scanned invoices alone are not considered e-invoices. The system covers tax invoices, simplified tax invoices, credit notes, and debit notes. Phase 2 requires integration with ZATCA's Fatoora platform.
What is the difference between ZATCA Phase 1 and Phase 2?
ZATCA e-invoicing is being implemented in two main phases. Phase 1, known as the Generation Phase, became mandatory on 4 December 2021. It requires taxpayers subject to the e-invoicing regulations to generate and store invoices and notes electronically using a compliant solution. Phase 1 focuses primarily on ensuring that businesses stop using handwritten invoices, text-editing tools, or spreadsheets as their invoicing system. The electronic solution must generate invoices with the required information and meet ZATCA's basic technical requirements, including QR code requirements for simplified tax invoices. Phase 2, known as the Integration Phase, started on 1 January 2023 and is being introduced gradually in waves. It adds more technical and business requirements. Businesses in each wave must integrate their e-invoicing solution with ZATCA's Fatoora platform, use the required invoice format, and include additional mandatory fields. The important difference is that Phase 1 is primarily about generating and storing compliant invoices, while Phase 2 is about integrating the business's e-invoicing system with ZATCA and enabling electronic transmission and validation through the required framework. Key points Phase 1: Generation and storage of compliant e-invoices. Phase 1 became mandatory on 4 December 2021. Phase 2: Integration with ZATCA's Fatoora platform. Phase 2 started on 1 January 2023 and is implemented in waves. Phase 2 introduces additional technical, security, and invoice-format requirements.
What is Wave 25 of ZATCA e-invoicing and who does it cover?
Wave 25 is the latest announced wave of ZATCA's Phase 2 e-invoicing rollout. ZATCA announced the criteria for Wave 25 on 24 July 2026. Wave 25 covers taxpayers whose revenues subject to VAT exceeded SAR 187,500 during any one of the years 2022, 2023, 2024, or 2025. Businesses that fall within this criterion are required to integrate their e-invoicing solutions with the Fatoora platform by no later than 1 February 2027. ZATCA has stated that it will notify the targeted taxpayers in this wave. The requirement is therefore based on the specified historical VAT-subject revenue criterion rather than simply looking at a business's current-year revenue. Businesses included in Wave 25 should use the time before the February 2027 deadline to assess their existing invoicing system, select a compliant solution, complete integration, test invoice flows, and ensure that their system meets ZATCA's Phase 2 requirements. Key points Wave 25 was announced on 24 July 2026. The threshold is more than SAR 187,500 in VAT-subject revenue. Revenue is assessed for 2022, 2023, 2024, or 2025. The integration deadline is 1 February 2027. Targeted taxpayers will be notified by ZATCA.
How do I know which ZATCA e-invoicing wave I'm in?
ZATCA's Phase 2 waves are determined using specific criteria for targeted taxpayer groups. One of the main criteria used in recent waves is the taxpayer's VAT-subject revenue during specified historical years. ZATCA announces the selection criteria for each wave and directly notifies taxpayers who are targeted. For Wave 25, for example, ZATCA selected taxpayers whose VAT-subject revenue exceeded SAR 187,500 during 2022, 2023, 2024, or 2025. Therefore, businesses should not determine their wave only by looking at their current annual turnover. They should review ZATCA's announcement for the relevant wave, compare their VAT-subject revenue against the announced threshold and years, and check for an official notification from ZATCA. ZATCA has stated that taxpayers are notified of their Phase 2 wave at least six months before their integration date. This gives businesses time to prepare their e-invoicing solution and complete the required integration. Key points ZATCA announces the criteria for each Phase 2 wave. Wave selection can depend on VAT-subject revenue from specified historical years. ZATCA directly notifies targeted taxpayers. Businesses should check their ZATCA notifications and official wave announcements. ZATCA provides at least six months' notice for Phase 2 waves.
What is the SAR 187,500 threshold for ZATCA Phase 2?
The SAR 187,500 threshold is the revenue criterion ZATCA has used for selecting taxpayers for Wave 25 of Phase 2 e-invoicing. For Wave 25, ZATCA stated that the targeted group includes taxpayers whose revenues subject to VAT exceeded SAR 187,500 during 2022, 2023, 2024, or 2025. It is important to understand that this figure is specifically the Wave 25 selection threshold. It should not be confused with the mandatory VAT registration threshold or treated as a general ZATCA Phase 2 threshold that applies to every wave. For example, ZATCA used different revenue thresholds for previous waves. Wave 21 used SAR 1.25 million, Wave 22 used SAR 1 million, while Wave 25 uses SAR 187,500. This shows that the threshold can change from one wave to another. Businesses should therefore always check the specific ZATCA announcement for their wave instead of assuming that one revenue threshold applies to all Phase 2 taxpayers. Key points SAR 187,500 is the Wave 25 selection threshold. It refers to VAT-subject revenue, not simply total business revenue. The relevant years for Wave 25 are 2022 to 2025. The threshold is specific to Wave 25. Previous ZATCA waves used different revenue thresholds.
What happens if I missed my ZATCA integration deadline?
Penalties (ZATCA): Failure to comply with e-invoicing requirements can result in fines ranging from SAR 5,000 to SAR 50,000 per violation, along with potential additional penalties for repeated or continued non-compliance. Missing a ZATCA integration deadline does not mean that the business can simply wait for another wave or ignore the requirement. Once a taxpayer is targeted for Phase 2, it remains responsible for meeting the applicable e-invoicing requirements and integration obligations. If a business has missed its deadline, it should prioritize completing the integration as soon as possible and review its compliance position with ZATCA. The business should also make sure that its e-invoicing solution meets the Phase 2 technical and security requirements before continuing normal operations. ZATCA has established procedures for reporting technical incidents that prevent taxpayers from generating electronic invoices or notes. Where a genuine technical problem affects invoice generation, taxpayers can notify ZATCA through its failure-notification service and are expected to resume compliant invoice generation once the issue is resolved. Businesses should not assume that a technical issue or missed deadline automatically removes their compliance obligations. The appropriate response is to resolve the integration issue, document relevant problems, and address any applicable ZATCA requirements or penalties. A compliant e-invoicing platform such as Complyance can help businesses identify integration gaps, prepare their invoice data, and work toward completing ZATCA integration requirements. Key points Missing the deadline does not remove the Phase 2 obligation. Businesses should complete integration as soon as possible. Technical failures that prevent invoice generation should be reported to ZATCA where applicable. Keep records of technical issues and corrective actions. Use a compliant solution to address integration and technical gaps.
Will there be more ZATCA waves after Wave 25?
Yes. Wave 25 is not necessarily the end of ZATCA's Phase 2 rollout. ZATCA has stated that Phase 2 is being implemented gradually in waves and that taxpayers in subsequent waves will be informed directly at least six months before their integration date. This means businesses that were not included in Wave 25 should not assume that they are permanently outside the Phase 2 requirements. ZATCA has progressively lowered the revenue criteria used to identify targeted taxpayers across different waves. For example, earlier waves used thresholds in the millions of Saudi Riyals, while Wave 25 uses a threshold of more than SAR 187,500. The continued wave-based approach allows ZATCA to bring additional taxpayer groups into the integration phase over time. Businesses should therefore continue monitoring official ZATCA announcements even if they have not yet received a wave notification. Key points Wave 25 does not mean that Phase 2 is finished. ZATCA has confirmed that Phase 2 continues through successive waves. Future taxpayers will be notified at least six months before their integration date. Revenue thresholds have generally decreased across later waves. Businesses not yet notified should continue monitoring ZATCA announcements.
Does ZATCA notify me before my integration deadline?
Yes. ZATCA has stated that taxpayers targeted for Phase 2 are notified directly and that taxpayers in upcoming waves will be informed at least six months before their integration date. For Wave 25, ZATCA announced that targeted taxpayers would be notified before they are required to integrate their e-invoicing solutions with the Fatoora platform by 1 February 2027. However, businesses should not rely exclusively on receiving a notification before beginning preparation. The wave criteria are publicly announced by ZATCA, and businesses can review those criteria in advance to understand whether they may fall within a targeted group. Early preparation is particularly important because businesses may need to update their ERP or accounting system, map invoice data, configure the e-invoicing solution, obtain the required credentials, test transactions, and complete the integration process before the deadline. Key points ZATCA directly notifies taxpayers targeted for Phase 2. Notifications are provided at least six months before the integration date. Wave criteria are publicly announced by ZATCA. Businesses should not wait for a notification before starting preparation. Early integration reduces the risk of last-minute technical issues.
What counts as VAT-subject revenue for a ZATCA wave threshold?
For ZATCA Phase 2 wave selection, the relevant criterion is revenue subject to VAT for the specific years identified in the wave announcement. This is different from simply looking at a company's total revenue or current-year turnover. Businesses need to consider the revenue that falls within the scope of VAT when assessing whether they meet a particular wave's threshold. For Wave 25, ZATCA specifically stated that the selection criterion is taxpayers whose revenues subject to VAT exceeded SAR 187,500 during 2022, 2023, 2024, or 2025. Because different waves can specify different years and thresholds, businesses should assess their revenue against the exact criteria published by ZATCA for the relevant wave. If there is uncertainty about whether a particular revenue stream is subject to VAT, businesses should review the applicable Saudi VAT rules and their tax records rather than automatically treating total company revenue as the wave-selection figure. Key points ZATCA uses VAT-subject revenue for wave selection. Total company revenue should not automatically be treated as the relevant figure. The applicable years depend on the specific ZATCA wave. Wave 25 considers 2022, 2023, 2024, or 2025. Wave 25 uses a threshold of more than SAR 187,500.
Do I still have to integrate if my revenue has since dropped below the threshold?
Generally, a later decrease in revenue does not by itself mean that a taxpayer selected for a ZATCA Phase 2 wave can ignore the integration requirement. ZATCA's wave-selection criteria are based on the specific historical revenue periods identified in each wave announcement. For Wave 25, for example, taxpayers are targeted if their VAT-subject revenue exceeded SAR 187,500 during 2022, 2023, 2024, or 2025. This means a business could have qualified based on revenue in one of those historical years and subsequently experience lower revenue. The later reduction does not automatically change the fact that the business was selected based on the published wave criteria. Businesses that have received a ZATCA notification should therefore not assume that a recent decline in revenue removes the integration obligation. If there is a specific change in the business's tax status or circumstances that could affect its obligations, the business should verify the position with ZATCA or a qualified Saudi tax adviser. Key points Wave selection is based on the specified historical revenue periods. A later decline in revenue does not automatically cancel the integration requirement. Wave 25 looks at VAT-subject revenue during 2022 to 2025. Businesses that have received a ZATCA notification should continue preparing for integration. Any change in tax status should be assessed separately with reference to the applicable ZATCA rules.
What is the difference between clearance and reporting under ZATCA?
Clearance and reporting apply to different types of e-invoices. Clearance applies to standard Tax Invoices, generally used for B2B transactions. The invoice is submitted to ZATCA through the integrated solution, where ZATCA validates it against the applicable requirements. If it passes the required checks, ZATCA applies its cryptographic stamp and returns the cleared invoice information. The cleared invoice can then be issued to the buyer. Reporting applies to Simplified Tax Invoices, generally used for B2C transactions. These invoices are generated and issued by the taxpayer first, then submitted to the Fatoora platform for reporting within 24 hours. ZATCA validates the submitted document and returns an acceptance, warning, or rejection response. The key difference is therefore that clearance happens before a standard invoice is finalized for the buyer, while reporting happens after a simplified invoice is issued. Key points Standard Tax Invoice = Clearance. Simplified Tax Invoice = Reporting. Clearance is required before issuing the cleared standard invoice. Simplified invoices must be reported within 24 hours. ZATCA applies its cryptographic stamp to cleared standard invoices.
How long do I have to report a simplified invoice to ZATCA?
A Simplified Tax Invoice must be reported to ZATCA within 24 hours of its issuance. The taxpayer generates the simplified invoice through its compliant e-invoicing solution, including the required cryptographic stamp and QR code. The invoice is then transmitted to the Fatoora platform through the Reporting API. This is different from the clearance process for standard Tax Invoices. A simplified invoice is not sent to ZATCA for clearance before it is issued to the customer. Key points Reporting deadline: within 24 hours of issuance. Applies to Simplified Tax Invoices and associated notes. Submission is made electronically through the Reporting API. The submitted invoice must be in the required structured format. Rejected submissions need to be corrected and resubmitted according to ZATCA requirements.
What is the Fatoora platform?
Fatoora is ZATCA's e-invoicing platform used to connect taxpayers' compliant e-invoicing solutions with ZATCA during Phase 2 of Saudi Arabia's e-invoicing programme. Businesses do not normally create every invoice manually inside Fatoora. Instead, their compliant Electronic Generation Solution (EGS) integrates with ZATCA's platform through the prescribed APIs. Depending on the invoice type, Fatoora performs functions such as clearance or reporting, validates submitted documents, returns API responses, and supports the onboarding and certificate processes required for integration. ZATCA also provides tools such as the Integration Sandbox, SDK, and web-based validator to help taxpayers and solution providers test their implementations. Key points Fatoora is ZATCA's e-invoicing platform. Businesses integrate their compliant EGS with Fatoora. Standard invoices go through clearance. Simplified invoices are reported. Fatoora provides validation and API responses. ZATCA's testing toolkit supports integration testing.
Does ZATCA approve every invoice before I can send it to my customer?
No. The answer depends on the type of invoice. For a standard Tax Invoice, the invoice goes through ZATCA's clearance process. The taxpayer submits it through its integrated solution, and ZATCA validates it before the cleared invoice is issued to the buyer. For a Simplified Tax Invoice, there is no pre-clearance. The seller generates and provides the invoice to the customer and then reports it to ZATCA within 24 hours. It is therefore incorrect to describe ZATCA as approving every invoice before a customer receives it. Key points Standard Tax Invoice: clearance before final issuance. Simplified Tax Invoice: issued first, then reported. Simplified invoices are not individually pre-approved by ZATCA. The taxpayer remains responsible for ensuring that its invoices comply with the applicable requirements.
What happens if Fatoora is down when I need to issue an invoice?
ZATCA's guidance provides procedures for technical incidents and temporary connectivity problems. For example, if ZATCA's servers are temporarily unavailable during a B2B clearance attempt, the taxpayer can continue with the transaction under the prescribed contingency approach, retain evidence and records, and continue attempting to connect to ZATCA. Once the connection is restored, the invoice must be submitted for clearance and the compliant cleared invoice issued. For a failure in the taxpayer's own e-invoicing solution that prevents invoice generation, ZATCA requires the taxpayer to notify the Authority through the designated failure-notification process and notify ZATCA once the issue has been resolved. The important point is that an outage does not remove the taxpayer's obligation to clear or report the affected invoices. The outstanding transactions must be processed once the system becomes operational. Key points ZATCA has procedures for temporary technical failures. Taxpayers should retain evidence of connectivity or system problems where relevant. A taxpayer-side system failure must be notified to ZATCA. Outstanding invoices must be cleared or reported once the system is operational. Do not treat an outage as a permanent exemption from e-invoicing requirements.
What is a CSID in ZATCA e-invoicing?
A Cryptographic Stamp Identifier (CSID) is a cryptographic certificate associated with an Electronic Generation Solution Unit. It provides the electronic identity used by the EGS for authenticated communication with ZATCA and for cryptographically stamping applicable invoices. ZATCA's technical guidance describes the CSID as a credential used for authenticated signing and encryption of communication. The CSID is associated with an individual EGS or solution unit rather than simply being a general certificate for an entire company. The onboarding process therefore captures information about the particular solution unit, including its identifier, serial number and location. Key points CSID means Cryptographic Stamp Identifier. It is a cryptographic certificate. It identifies an EGS or solution unit. It supports authenticated communication with ZATCA. It is used for cryptographic stamping of applicable Simplified Tax Invoices. CSIDs are part of the Reporting and Clearance API authentication process.
What is the difference between a Compliance CSID and a Production CSID?
The Compliance CSID is an intermediate certificate used during onboarding, while the Production CSID is used for the live production environment. After the taxpayer's EGS submits its Certificate Signing Request, ZATCA provides a Compliance CSID. The EGS then completes the required compliance checks. Once the onboarding requirements are successfully completed, the EGS can obtain its Production CSID. The Production CSID is subsequently used to authenticate the EGS when communicating with ZATCA's production environment. In other words, the Compliance CSID is part of the onboarding and compliance-testing stage, while the Production CSID is the credential used for live production integration. Key points Compliance CSID = intermediate onboarding credential. Production CSID = live production credential. Compliance checks are performed using the Compliance CSID. The Production CSID is issued after successful completion of the required process. A taxpayer's EGS uses the Production CSID for production communication with ZATCA.
How do I generate a CSR for ZATCA onboarding?
A Certificate Signing Request (CSR) is generated by the taxpayer's Electronic Generation Solution as part of the onboarding process. The CSR contains information that identifies the EGS and taxpayer. ZATCA's technical documentation includes fields such as the solution-unit name or asset tracking number, EGS serial information, VAT or Group VAT Registration Number, organization information, invoice type/functionality, and the location of the branch, device, or solution unit. The EGS submits the CSR to ZATCA after obtaining the required OTP. ZATCA then uses the CSR as part of the process for issuing the Compliance CSID. Because CSR generation is tied to the EGS's technical configuration, businesses normally generate it through their compliant e-invoicing solution rather than manually creating a certificate request in the Fatoora website. Key points CSR means Certificate Signing Request. It is generated by the EGS. It identifies the solution unit and taxpayer. The CSR includes the VAT or Group VAT Registration Number and solution/location information. An OTP is required as part of the CSR submission process. A successful CSR submission leads to issuance of a Compliance CSID.
How long is the ZATCA Fatoora OTP valid?
The Fatoora OTP is valid for one hour according to ZATCA's technical documentation. The OTP is generated through the Fatoora onboarding process and is used as part of the CSR submission and certificate onboarding flow. ZATCA also states that OTPs are obtained through the Fatoora portal, rather than through an API. If the OTP expires before the CSR process is completed, the taxpayer must obtain a new valid OTP. Key points Fatoora OTP validity: 1 hour. OTP is used during the onboarding/CSR process. ZATCA states that OTPs are obtained through the portal. An expired OTP can cause CSR submission failure. Up to 100 OTPs can be requested at once according to ZATCA's technical guidance.
How do I onboard multiple branches or devices with ZATCA?
ZATCA's onboarding model is based on EGS or solution units. A taxpayer can therefore have multiple onboarded EGS units associated with its VAT registration. Each solution unit is identified through information included in its CSR, such as its common name or asset tracking number, serial information, organization unit, and the location of the relevant branch, device, or solution unit. The Fatoora portal provides a list of the taxpayer's onboarded EGS units. Each unit goes through the required certificate process and receives its applicable CSID. For businesses operating multiple branches, POS devices, or invoice-generation systems, the exact technical architecture should be designed so that each EGS unit is correctly identified and its invoices are generated and submitted through the compliant integration. Key points Multiple EGS units can be onboarded under a taxpayer. Each unit has identifying information in its CSR. Branch/device/location information can form part of the EGS identity. CSIDs are issued for the relevant EGS units. Fatoora provides a view of the taxpayer's onboarded EGS units. Businesses with many branches or devices should structure the onboarding around their actual invoice-generation architecture.
Can I still issue PDF invoices in Saudi Arabia?
Yes, but a PDF by itself is not considered a compliant ZATCA e-invoice. For Phase 2, a Tax Invoice can be generated in XML or PDF/A-3 with embedded XML. However, when submitting a Tax Invoice to the FATOORA Platform for clearance, the taxpayer must submit the XML, not the PDF/A-3 file. For customer presentment, Phase 2 Tax Invoices can be shared in XML or PDF/A-3 with embedded XML. A normal PDF generated from an ERP or accounting system without the required embedded structured XML should therefore not be treated as the e-invoice itself. The distinction is important for businesses migrating from traditional PDF invoicing. The human-readable PDF can remain part of the customer experience, but the underlying structured XML must satisfy ZATCA's technical and business requirements. Key points A standalone PDF is not a ZATCA e-invoice. Phase 2 Tax Invoices can be generated as XML or PDF/A-3 with embedded XML. XML must be submitted to FATOORA for clearance. PDF/A-3 is not submitted to FATOORA instead of XML. Customer presentment can use XML or PDF/A-3 with embedded XML. Existing PDF workflows need to be adapted to produce compliant structured data.
What fields are mandatory on a ZATCA standard tax invoice?
A ZATCA standard Tax Invoice must contain the applicable fields required under Saudi VAT regulations and the ZATCA e-invoicing specifications. These include information identifying the invoice, supplier and buyer, transaction details, tax treatment and totals, together with technical fields required by the Phase 2 e-invoicing system. For a typical B2B Tax Invoice, key information includes the invoice type and reference number, issue date and time, supplier name, address and VAT registration number, buyer information including VAT registration number where applicable, description of goods or services, quantities, prices, taxable amounts, VAT rates and VAT amounts, and invoice totals. Phase 2 also introduces technical requirements such as the UUID, invoice counter value, previous invoice hash and cryptographic security features. The exact mandatory or conditional fields depend on the invoice type and transaction scenario. Key points Invoice type and invoice reference number are required. Supplier identification and VAT registration details are required. Buyer information is required for applicable standard Tax Invoices. Invoice date and applicable transaction dates must be represented correctly. Goods or services, quantities, prices and tax information must be included. VAT rates, taxable amounts, VAT amounts and totals must be correctly calculated. Phase 2 adds technical fields such as UUID, invoice counter and previous invoice hash.
How is a ZATCA simplified tax invoice different from a standard one?
A Simplified Tax Invoice generally applies to B2C transactions and contains fewer mandatory fields than a standard Tax Invoice. It normally does not require the same level of buyer identification as a standard B2B Tax Invoice. ZATCA also allows Simplified Tax Invoices to be used in certain B2B situations, including supplies below SAR 1,000, subject to the applicable rules. The processing model is also different in Phase 2. Standard Tax Invoices are submitted to FATOORA for clearance, while Simplified Tax Invoices are submitted for reporting within 24 hours of issuance. Simplified Tax Invoices must also include the required Phase 2 QR code. The distinction should therefore be reflected in the ERP or billing system when determining invoice type, required buyer information, transaction indicators and the applicable ZATCA submission process. Key points Standard Tax Invoices are generally used for B2B transactions. Simplified Tax Invoices are generally used for B2C transactions. Simplified invoices contain fewer mandatory fields. Buyer information is generally less extensive on simplified invoices. Standard invoices are subject to ZATCA clearance. Simplified invoices are reported to ZATCA within 24 hours. Simplified invoices require the applicable Phase 2 QR code.
Do ZATCA e-invoices have to be in Arabic?
Yes. ZATCA states that the data fields visible on the human-readable form of Tax Invoices and Simplified Tax Invoices must be in Arabic. The invoice can also be bilingual and include English. This requirement applies to the customer-facing representation of the invoice. Businesses using English-language ERP systems therefore need to ensure that their invoice templates can generate the required Arabic content while preserving the underlying structured XML data. For multilingual businesses, the practical approach is generally to maintain the required Arabic representation while optionally displaying English alongside it. Key points Human-readable invoice data must be in Arabic. English can be included alongside Arabic. Bilingual invoices are permitted. The requirement applies to Tax Invoices and Simplified Tax Invoices. Credit and debit notes are also subject to the Arabic-language requirement. ERP and invoice templates should support Arabic rendering correctly.
Why is ZATCA rejecting my invoices?
ZATCA can reject an invoice when it fails one or more of the required technical, structural, business or validation checks. Common causes include incorrect XML structure, missing mandatory fields, invalid code values, incorrect VAT calculations, incorrect invoice-type indicators, invalid cryptographic information, or inconsistencies between related invoice fields. For Phase 2, FATOORA validates submitted XML against the XML Implementation Standard and performs additional referential checks. A response such as HTTP 400 indicates that the submission failed validation and was rejected, while other responses such as 401 indicate an authentication problem rather than an invoice-content rejection. The correct approach is to review the detailed validation response, identify the specific rule that failed, correct the source data or XML generation logic, and resubmit according to the applicable ZATCA process. Key points Missing mandatory fields can cause rejection. Incorrect XML structure can cause rejection. Invalid codes or tax calculations can trigger validation errors. Incorrect invoice-type indicators can cause business-rule failures. Cryptographic or security-field problems can prevent acceptance. HTTP 400 generally indicates a rejected submission after validation. The detailed ZATCA validation message should be used to identify the required correction.
What does a 401 Unauthorized error from the ZATCA API mean?
A 401 Unauthorized response indicates an authentication or authorization problem. ZATCA's detailed guidelines specifically instruct taxpayers receiving a 401 response to check the authentication certificate and secret before resubmitting. This is different from a rejected invoice caused by a business or XML validation error. In a 401 scenario, the invoice has not successfully reached the stage where ZATCA validates the invoice content. The implementation team should therefore first verify the credentials, certificate, endpoint and authentication configuration being used for the relevant environment. Particular attention should be paid to using the correct credentials for the correct environment, such as simulation versus production, and ensuring that the authentication certificate and secret correspond to the EGS being used. Key points 401 means unauthorized access. It generally indicates an authentication or authorization problem. Check the authentication certificate and secret. Verify that the correct environment and endpoint are being used. Confirm that the credentials belong to the relevant EGS. A 401 is different from an invoice-content validation rejection. Resolve the authentication issue before troubleshooting XML business rules.
What does error BR-KSA-31 mean and how do I fix it?
BR-KSA-31 is a ZATCA business rule related to transaction indicators on Simplified Tax Invoices and their associated credit or debit notes. For a Simplified Tax Invoice, only certain transaction indicators can be marked as applicable. ZATCA's XML Implementation Standard specifies that third-party transactions, nominal supplies and summary transactions can be indicated, while export and self-billing indicators are not permitted for simplified invoices. To resolve the error, check the invoice's Saudi transaction type indicator, commonly represented through the KSA-2 value. If the document is genuinely an export or self-billed transaction, it should not be incorrectly classified as a Simplified Tax Invoice. If it is a normal simplified transaction, remove the prohibited indicator and regenerate the XML according to the applicable invoice type. Key points BR-KSA-31 relates to transaction indicators on Simplified Tax Invoices. Export transactions cannot be marked as simplified under this rule. Self-billing cannot be marked as simplified under this rule. Third-party, nominal and summary transaction indicators are permitted. Check the KSA-2 transaction-type value. Correct the invoice classification or indicator before resubmitting. Validate the corrected XML against the ZATCA rules before submission.
What is the difference between a schema error and a business rule error in ZATCA?
A schema error means the XML does not conform to the technical structure expected by ZATCA. This can include incorrect XML structure, invalid data types, incorrect element placement, missing required XML elements or invalid values that violate the XML schema. A business rule error occurs when the XML may be structurally valid but the information does not comply with a specific ZATCA business requirement. Examples include an invalid combination of invoice indicators, incorrect tax calculations, or a missing reference that is mandatory for a particular transaction. ZATCA's XML Implementation Standard contains both the technical structure and business validation requirements used for electronic invoices. Key points Schema errors concern the technical structure of the XML. Business-rule errors concern the meaning or combination of invoice data. Schema validation should be completed before business-rule validation. Business-rule codes generally identify the specific ZATCA requirement that failed. Both types of errors can result in rejection. Developers should validate XML locally before submitting it to FATOORA. Error handling should preserve the detailed ZATCA validation response for troubleshooting.
What do I do if my ZATCA invoice counter has a gap?
The invoice counter is a technical security feature of the compliant E-Invoice Generation Solution. ZATCA requires the counter to be tamper-resistant, non-resettable and incremented for every generated electronic invoice or associated note. A gap should therefore not simply be corrected by resetting or manually changing the counter. The first step is to determine why the counter advanced, for example because an invoice or note was generated but subsequently rejected, cancelled internally, or otherwise not transmitted. ZATCA's guidance also distinguishes between the invoice counter and submission sequence. A rejected document that is regenerated after correcting its errors receives its own new hash and counter value, while the previous invoice hash is based on the immediately preceding document in the applicable sequence. Key points The invoice counter must increment for every generated electronic invoice or note. The counter must not be manually reset or reformatted. Do not attempt to reuse an already consumed counter value. Investigate why the counter advanced without an accepted submission. Rejected documents follow ZATCA's prescribed resubmission process. Previous Invoice Hash must maintain the required document chain. Counter and hash handling should be controlled by the EGS rather than manually edited.
How do I issue a credit note under ZATCA Phase 2?
A ZATCA credit note is issued to adjust an existing Tax Invoice or Simplified Tax Invoice in circumstances permitted under the Saudi VAT regulations, such as cancellation or termination, changes to the consideration or nature of the supply, or return of goods. The credit note must correspond to the type of original invoice and must include a Billing Reference ID linking it to the original invoice. ZATCA's technical documentation states that this reference is mandatory and that every credit or debit note must refer to the original invoice to which it relates. The credit note is then processed according to the invoice type. In Phase 2, the relevant XML must contain the required invoice and security information and follow the applicable ZATCA clearance or reporting process. A credit note based on a Tax Invoice follows the Tax Invoice process, while a credit note based on a Simplified Tax Invoice follows the corresponding simplified process. Key points A credit note adjusts an existing invoice under permitted VAT circumstances. It must reference the original invoice. The Billing Reference ID is mandatory. The credit note must correspond to the original invoice type. Required invoice and tax information must be included. A credit note based on a Tax Invoice follows the standard invoice process. A credit note based on a Simplified Tax Invoice follows the simplified reporting process.
How do I cancel an invoice ZATCA has already cleared?
Once the Zakat, Tax and Customs Authority (ZATCA) has cleared a standard Tax Invoice, you cannot simply delete, modify, or cancel it. If the transaction is cancelled, the consideration changes, goods are returned, or an invoice correction is required, the supplier must issue an electronic credit note or debit note, as applicable, linked to the original invoice. ZATCA's guidance explicitly requires the adjustment document to reference the original invoice. The adjustment document must follow the applicable Phase 2 requirements. A credit or debit note based on a standard Tax Invoice follows the standard clearance process, while one based on a Simplified Tax Invoice follows the simplified reporting process. The original invoice should remain in the records so the transaction and its adjustment can be traced. Key points A cleared invoice cannot simply be deleted or cancelled. Issue an electronic credit note or debit note, depending on the adjustment. Reference the original invoice using the required invoice reference. Apply the correct VAT treatment to the adjustment. Follow the clearance or reporting process that applies to the original invoice type. Keep the original invoice and adjustment document for audit purposes.
How does ZATCA handle export and zero-rated invoices?
Export transactions remain subject to Saudi e-invoicing requirements. A Saudi VAT-registered business making a supply to a foreign customer must generate the appropriate electronic invoice, even when the transaction qualifies for zero-rating. The invoice must follow the applicable ZATCA requirements and use the correct invoice type and tax treatment. For Phase 2, the invoice should include the appropriate export indicator and the applicable VAT category and exemption reason code. ZATCA's XML Implementation Standard identifies specific reason codes for zero-rated exports of goods and services. Zero-rating must be supported by the relevant VAT rules and evidence; it should not be applied merely because the customer is outside Saudi Arabia. Standard Tax Invoices must be submitted to FATOORA for clearance before being issued to the buyer. The applicable reporting process should be followed if the transaction requires a Simplified Tax Invoice. Key points Export transactions are within the e-invoicing framework. Zero-rated supplies still require the appropriate electronic invoice. Use the correct invoice type and export indicator. Apply the appropriate VAT category and reason code. Retain evidence supporting the zero-rated treatment. Standard Tax Invoices require clearance through FATOORA. Confirm the VAT treatment against the applicable Saudi VAT rules.
How does self-billing work under ZATCA e-invoicing?
Self-billing is an arrangement in which the buyer issues the invoice on behalf of the supplier. Under ZATCA's e-invoicing specifications, the self-billing indicator applies to B2B transactions. The invoice must clearly identify that it is self-billed and comply with the applicable Saudi VAT and e-invoicing requirements. For Phase 2 standard invoices, the buyer submits the self-billed document to FATOORA for clearance. ZATCA's technical guidance states that the buyer and supplier must have a self-billing agreement approved by ZATCA. The buyer must therefore ensure that the arrangement and its invoicing system meet the applicable requirements before issuing invoices under this model. Key points Self-billing means the buyer issues an invoice on behalf of the supplier. It applies to B2B transactions under ZATCA's specifications. The invoice must carry the appropriate self-billing indicator. The buyer and supplier must have the required ZATCA-approved agreement. Standard self-billed invoices are submitted by the buyer for clearance. The invoice must comply with the relevant VAT and technical requirements.
Can I issue ZATCA e-invoices in a currency other than SAR?
Yes. Saudi e-invoices can use a currency other than Saudi Riyal (SAR). ZATCA's XML Implementation Standard requires the currency to be represented using the appropriate alphabetic currency code from ISO 4217. However, the VAT amount must be converted into SAR for VAT reporting purposes using the applicable exchange rate published by the Saudi Central Bank (SAMA). The SAR VAT amount must be shown on the Tax Invoice as required by the VAT regulations. Businesses should configure their ERP and e-invoicing solution to preserve the original invoice currency while calculating and representing the required SAR tax amount. Exchange-rate handling should follow the applicable VAT rules for the date on which the tax becomes due. Key points Foreign-currency e-invoices are permitted. Use the correct ISO 4217 currency code. VAT must be converted into SAR for VAT reporting. Apply the relevant SAMA exchange rate. Show the SAR VAT amount on the Tax Invoice as required. Configure ERP currency and tax mappings correctly. Validate the currency and tax fields before submitting the invoice.
What are the penalties for ZATCA e-invoicing non-compliance?
ZATCA can impose penalties for violations such as failing to issue and retain electronic invoices, failing to keep invoices in the required format, not reporting a malfunction that prevents invoice issuance, omitting a mandatory QR code, using prohibited system functions, or deleting or modifying invoices after issuance. The penalty depends on the type and repetition of the violation. ZATCA's published VAT violations and penalties guide describes a graduated approach for e-invoicing violations: an alert or notice for the first violation, followed by fines of SAR 1,000, SAR 5,000, SAR 10,000 and SAR 40,000 for subsequent violations, according to the applicable violation and repetition rules. These amounts should not be treated as a single universal penalty for every e-invoicing issue. Other VAT violations may have separate penalties. Businesses should review the specific violation, the applicable penalty schedule and any current ZATCA guidance before determining the financial exposure. Key points Penalties depend on the type and repetition of the violation. Violations can include failure to issue or retain electronic invoices. Deleting or modifying issued invoices can lead to penalties. QR-code and system-security violations may also be penalised. ZATCA's published guide describes escalating penalties for repeated violations. Other VAT violations may have separate penalty rules. Review the specific violation and current official guidance before calculating exposure.
Is the ZATCA penalty waiver still available?
ZATCA's most recent official announcement located for this initiative states that the Cancellation of Fines and Exemption of Financial Penalties Initiative was extended until 30 June 2026. That extension covered specified penalties under Saudi tax laws, including certain VAT field violations related to e-invoicing. That published extension period has now ended, and no subsequent official announcement extending the same initiative beyond 30 June 2026 has been verified. Businesses should therefore not assume that the waiver remains available without checking the latest ZATCA announcements or confirming their eligibility directly with the Authority. The previous initiative also had conditions, including registration under the relevant tax system, submission of outstanding returns and payment of the principal tax due or an approved instalment arrangement. Some penalties, including those related to tax evasion and penalties already paid before the initiative's effective period, were excluded. Key points The published 2026 extension ended on 30 June 2026. No later official extension has been verified. Do not assume that the waiver is currently available. Previous eligibility conditions included registration and filing outstanding returns. Principal tax liabilities had to be paid or covered by an approved instalment plan. Tax-evasion penalties and certain previously paid penalties were excluded. Check the latest ZATCA announcement before relying on a waiver.
How long must e-invoices be kept in Saudi Arabia?
Saudi VAT rules generally require tax invoices and supporting accounting records to be retained for at least six years. Longer retention periods apply to certain capital assets: records relating to movable capital assets generally need to be kept for 11 years, while records relating to immovable capital assets generally need to be kept for 15 years. Electronic invoices and related notes must be retained in accordance with the applicable record-keeping requirements. Businesses should ensure that records remain accessible, readable and available to ZATCA when requested. Retention policies should cover not only issued invoices but also credit notes, debit notes, supporting records and relevant transaction evidence. Key points The general VAT record-retention period is at least six years. Movable capital asset records generally require 11 years. Immovable capital asset records generally require 15 years. Retain invoices, credit notes, debit notes and supporting records. Records must remain accessible and available to ZATCA. Configure retention and retrieval processes in the ERP and e-invoicing system. Confirm the applicable period for the specific record type.
What does ZATCA examine during an e-invoicing audit?
During an e-invoicing review or audit, ZATCA may examine whether the business issues and retains electronic invoices in the required format, includes the mandatory invoice information, applies the correct VAT treatment, and follows the applicable Phase 1 or Phase 2 requirements. For Phase 2 taxpayers, this can include reviewing the integration with FATOORA, clearance or reporting responses, XML structure and required security features. Businesses should also be prepared to explain invoice sequences, counter values, previous invoice hashes, credit and debit notes, and the relationship between invoices and their supporting transaction records. Where a zero-rated export or another special VAT treatment is used, the business should retain the evidence supporting that treatment. Good audit preparation depends on consistent records across the e-invoicing system, ERP, accounting ledger and VAT returns. Businesses should be able to retrieve an invoice and its related documents without changing the original record. Key points ZATCA can examine invoice format and mandatory fields. VAT calculations and tax classifications may be reviewed. Phase 2 integration, clearance and reporting records may be examined. Security features, invoice counters and hash sequences should be maintained correctly. Credit notes and debit notes should be linked to the relevant original invoices. Supporting documents should substantiate export and zero-rated transactions. Electronic records should be retrievable and consistent with accounting and VAT records.
How do I connect my ERP to ZATCA FATOORA?
Connecting an ERP to ZATCA FATOORA usually involves integrating the ERP or billing system with a compliant E-Invoice Generation Solution (EGS). The solution must generate invoices in the required format and support the applicable Phase 2 integration requirements when the taxpayer is in an integration wave. ZATCA's technical specifications define the XML structure, security requirements and API processes used for this integration. The implementation process typically includes mapping ERP fields to ZATCA's invoice data requirements, configuring VAT codes and invoice types, implementing the required counter and hash logic, setting up authentication, and testing clearance or reporting through the appropriate environment. Standard Tax Invoices are cleared through FATOORA, while Simplified Tax Invoices are reported within the required period. Businesses can use an external solution provider or build and maintain their own compliant solution. In either case, the taxpayer remains responsible for meeting ZATCA's requirements. Key points Connect the ERP to a compliant EGS or e-invoicing solution. Map ERP fields to ZATCA's required invoice data. Configure VAT codes, invoice types and mandatory fields. Implement the required invoice counter, previous invoice hash and security features. Set up the appropriate authentication and API integration. Test standard invoice clearance and simplified invoice reporting. Monitor responses and handle rejected invoices correctly. Retain the records required to demonstrate compliance.
How do I choose a ZATCA e-invoicing solution provider?
Start by assessing whether the provider's solution meets the requirements for the relevant phase of ZATCA's e-invoicing programme. ZATCA publishes an indicative directory of solution providers that have passed its qualification process for Phase 1 or Phase 2. However, the directory is not a mandatory list, and ZATCA states that taxpayers may use any provider as long as the solution itself complies with the e-invoicing requirements. Inclusion in the directory is not a blanket guarantee of compliance for every implementation. Beyond technical compliance, assess the provider's ability to integrate with your ERP, handle invoice and credit-note workflows, manage authentication and security, support validation and error handling, and provide reliable monitoring and reporting. For businesses operating in multiple countries, consider whether the same platform can support additional jurisdictions without requiring a complete redesign of the integration architecture. Before selecting a provider, clarify implementation responsibilities, testing arrangements, support response times, service levels, pricing, data access and the process for handling ZATCA rule changes. Key points Check that the solution supports the applicable ZATCA phase. ZATCA's provider directory is indicative, not mandatory. Verify ERP and billing-system integration capabilities. Review XML validation, clearance, reporting and error handling. Assess authentication, security and data access controls. Confirm implementation support, service levels and pricing. Check how the provider handles regulatory and technical updates. Ensure your business retains the records and controls needed for compliance.
