E-Invoicing in Saudi Arabia: Phase 2 & Integration | Hespah LLC [Skip to main content](#main-content)[![Hespah LLC](https://centralcdn.hespah.com/home_logolight_file2png.webp)](/en)Search More [Home](/en) [Learning Hub](/en/courses) [About us](https://hespah.com/who-we-are) [Blog](/en/blog) [Contact Us](/en/contact) Login[New Account](/en/register) 1. [Home](/en) / 2. [Blog](/en/blog) / 3. E-Invoicing in Saudi Arabia: Phase Two and Integration Requirements E-Invoicing in Saudi Arabia: Phase Two and Integration Requirements =================================================================== 2026-08-26 / 2 months ago What is e-invoicing in Saudi Arabia? ------------------------------------ An electronic invoice is an invoice issued and stored in a structured electronic format through a compliant technical solution that meets the requirements of the Zakat, Tax and Customs Authority. A scanned paper invoice is not an electronic invoice. The system began in the Kingdom in two phases: the generation and storage phase from 4 December 2021, then the integration phase from 1 January 2023, which is being applied gradually to successive groups of taxpayers. The practical question facing business owners today is therefore no longer «will we be obliged?» but «when is our turn, and what must be ready before that date?». This article answers both, relying on what the Authority has published officially. ![Saudi e-invoicing Phase 1 (generation, from 4 December 2021) versus Phase 2 (integration, from 1 January 2023)](https://centralcdn.hespah.com/uploads/emils/17908061500.jpeg "Saudi e-invoicing Phase 1 (generation, from 4 December 2021) versus Phase 2 (integration, from 1 January 2023)") Phase one versus phase two of e-invoicing ----------------------------------------- Phase one focused on moving generation and storage to an electronic format inside the entity. Phase two adds an entirely new dimension: connecting the taxpayer's invoicing system to the Authority's Fatoora platform and sharing invoices with it electronically. The substantive difference is therefore not merely the form of the invoice, but the presence of a third party — the Authority — inside the invoicing cycle itself. A brief comparison follows: Point of comparison Phase one (generation and storage) Phase two (integration) Start date 4 December 2021 1 January 2023 Scope of application All subject taxpayers at once Successive groups determined by the Authority Integration with Authority systems Not required Required, with the Fatoora platform Invoice format Structured electronic format XML, or PDF/A-3 with embedded XML Cryptographic stamp Not required Required Technical requirements for integration -------------------------------------- The Authority's resolution on controls, requirements, technical specifications and procedural rules sets out a number of conditions the technical solution must satisfy. First, the solution must be able to issue every electronic invoice or electronic note in XML format, or PDF/A-3 with embedded XML. Second, invoices and their associated notes must carry a Cryptographic Stamp — an electronic stamp generated by encryption algorithms to guarantee the reliability and integrity of invoice data and to verify the identity of the issuer. Third, the solution must include a QR Code — a barcode in the form of a matrix of black and white squares readable by a scanner or a smart device camera, which the buyer uses through the VAT application to confirm the validity of electronic invoices and notes. Finally, a technical solution is treated as compliant once it has been verified against all those requirements. That verification takes place through the Authority, through a third party, or on a self-assessment basis by the person subject to the E-Invoicing Regulation, according to the mechanism the Authority determines. Clearance and reporting: two different paths for invoices --------------------------------------------------------- One thing many accountants overlook is that phase two does not treat all invoices the same way. It distinguishes between two types: 1. **Tax Invoice** — typically issued from one business to another. It is subject to the Clearance mechanism, under which the Authority verifies that the invoice meets the controls and details set out in the resolution and its two annexes, then applies the cryptographic stamp to compliant invoices only, notifying issuers before the invoice is presented to customers. 2. **Simplified Tax Invoice** — typically issued from a business to a consumer. It is subject to the Reporting mechanism: it must be sent to the Authority within a period not exceeding 24 hours from the date of issue, in accordance with the mechanism the Authority determines. A retail business issuing hundreds of simplified invoices a day therefore faces a completely different operational challenge from a contracting business issuing a handful of tax invoices. The first needs reliable transmission within the twenty-four-hour window; the second needs delivery of the invoice to the customer not to stall while clearance is pending. ![E-invoicing integration waves: wave 23 above 750,000 SAR, wave 24 above 375,000 SAR, wave 25 above 187,500 SAR, with integration deadlines](https://centralcdn.hespah.com/uploads/emils/17908061501.jpeg "E-invoicing integration waves: wave 23 above 750,000 SAR, wave 24 above 375,000 SAR, wave 25 above 187,500 SAR, with integration deadlines") Integration groups: when is your turn? -------------------------------------- Phase two applies to successive groups, and the Authority undertakes to notify targeted groups at least six months before the specified integration date. The Authority has announced the criteria for the most recent groups as follows: Group VAT-taxable revenue criterion Reference years Integration date Twenty-third Exceeding SAR 750,000 2022, 2023 or 2024 Before 31 March 2026 Twenty-fourth Exceeding SAR 375,000 2022, 2023 or 2024 Before 30 June 2026 Twenty-fifth Exceeding SAR 187,500 2022, 2023, 2024 or 2025 Before 1 February 2027 This progression makes clear that the revenue threshold falls with each new group, which in practice means the circle of covered entities keeps widening to include smaller and smaller businesses. An entity that has not yet been notified is therefore not outside the system — it is waiting its turn. How to prepare your business for phase two ------------------------------------------ Early preparation reduces both cost and operational disruption. The Authority has recommended a number of preparatory steps to taxpayers, most notably: 1. Visit the e-invoicing page on the Authority's website to keep up with developments. 2. Install or update the entity's invoicing system, referring to the list of technical solution providers published by the Authority. 3. Understand the elements of the electronic invoice and the fields required for each type. 4. Confirm that staff are ready to work with the electronic invoicing system. 5. Test issuing electronic invoices and verify them before the mandatory date, not after it. In addition, it is prudent for the entity to review its taxable revenue in the reference years above in order to estimate which group it is likely to fall into, rather than waiting for the notification. Frequently asked questions about e-invoicing -------------------------------------------- ### Are small businesses exempt from e-invoicing? Exemption is not permanent; it is a matter of timing. The selection criterion falls with each new group, and in the twenty-fifth group it reached VAT-taxable revenue exceeding SAR 187,500 in any of the years 2022, 2023, 2024 or 2025. ### What is the difference between clearance and reporting? Clearance applies to tax invoices: the Authority verifies the invoice and applies the cryptographic stamp before it is presented to the customer. Reporting applies to simplified tax invoices, and is done by sending them to the Authority within a period not exceeding 24 hours from the date of issue. ### What format is required for the electronic invoice in phase two? The technical solution must be able to issue every electronic invoice or note in XML format, or PDF/A-3 with embedded XML. ### How much notice does the Authority give before the integration date? The Authority undertakes to notify targeted groups at least six months before the specified integration date. ### Is updating the accounting system alone enough? No. The technical solution must be verified as compliant with the specifications and requirements — whether through the Authority, a third party, or self-assessment under the specified mechanism — and staff must be trained and issuance tested before the mandatory date. In summary ---------- Phase two of e-invoicing is not a cosmetic update. It changes where the Authority sits within the invoicing cycle. Between the format, cryptographic stamp and QR code requirements, the two paths of clearance and reporting, and the dates of the successive groups, early preparation is what separates a quiet transition from a breakdown on the first day of obligation. At Hespah Academy we offer specialised programmes in value added tax and tax compliance in the Kingdom, helping accountants and business owners read the statutory requirements and apply them in practice. Sources ------- - [Zakat, Tax and Customs Authority — E-invoicing overview](https://zatca.gov.sa/en/E-Invoicing/Pages/default.aspx) - [Zakat, Tax and Customs Authority — Implementation phases](https://zatca.gov.sa/en/E-Invoicing/Introduction/Pages/What-is-e-invoicing.aspx) Read more on e-invoicing and tax compliance ------------------------------------------- If you are qualifying yourself or your team for tax compliance in the Kingdom, these related materials may help: - [The difference between zakat, income tax and corporate tax in Saudi Arabia](https://hespah.com/en/blog/zakat-vs-income-tax-saudi) — who is subject to each, and at what rate. - [VAT Specialist certification](https://hespah.com/en/blog/shhad-akhsayy-dryb-alkym-almdaf) — the specialist track for those handling returns and invoices daily. - [Professional certifications for accountants and finance professionals in Saudi Arabia](https://hespah.com/en/blog/professional-certifications-saudi) — a full map of the available paths. *This article is for general information only and is not a substitute for consulting the official sources or a qualified specialist before taking any action.* Articles you might like ----------------------- [![Nitaqat Wage Floor Rises to SAR 5,000 Then SAR 6,000](https://centralcdn.hespah.com/265/conversions/cover-sm.webp)2026-10-26 ### Nitaqat Wage Floor Rises to SAR 5,000 Then SAR 6,000 The Nitaqat wage floor rises to SAR 5,000 after six months and SAR 6,000 after twelve, by royal directive of 25 October](/en/blog/nitaqat-wage-floor-2026)[![UAE e-Invoicing: the Provider Deadline Falls on 30 October](https://centralcdn.hespah.com/263/conversions/cover-sm.webp)2026-10-26 ### UAE e-Invoicing: the Provider Deadline Falls on 30 October E-invoicing in the UAE: appoint an accredited service provider by 30 October 2026 if revenues reach AED 50 million; go l](/en/blog/uae-einvoicing-asp-deadline)[![Reclaiming VAT on Real Estate Supplies: a 30-Day Window](https://centralcdn.hespah.com/181/conversions/cover-sm.webp)2026-10-14 ### Reclaiming VAT on Real Estate Supplies: a 30-Day Window ZATCA Board Resolution 10-04-26, published 13 October 2026, opens a VAT refund on real estate supplies made by individua](/en/blog/vat-real-estate-supplies-refund)[![ZATCA Objection: The Full Appeal Path, Step by Step](https://centralcdn.hespah.com/138/conversions/cover-sm.webp)2026-10-06 ### ZATCA Objection: The Full Appeal Path, Step by Step A ZATCA objection runs on deadlines: 60 days to file a grievance, 90 for ZATCA to rule, 30 to settle or litigate. 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