ZATCA e-invoicing Phase 2: what your system needs to connect to Fatoora

E-invoicing is now a reality for most businesses in Saudi Arabia. Phase 1 (generating and storing invoices) began on 4 December 2021, and Phase 2 (integrating with the Fatoora platform) began in January 2023, rolling out in waves.

This covers the technical side. For the tax side, check with your accountant and the Zakat, Tax and Customs Authority (ZATCA).

Does integration apply to me?

ZATCA defines each wave by a taxable revenue threshold, and the threshold keeps falling. The wave for businesses above SAR 750,000 had a deadline of 31 March 2026, the wave above SAR 375,000 had a deadline of 30 June 2026, and ZATCA continues to bring in smaller businesses. Confirm your wave and deadline directly with ZATCA, because the dates get updated.

Clearance and reporting: what's the difference?

• Tax invoices (business to business): these go through clearance. You send the invoice to the platform and it's approved before you give it to the buyer.
• Simplified tax invoices (business to consumer): these go through reporting. You give it to the customer immediately and report it to the platform within 24 hours.

This shapes your system's design: clearance needs a connection at the moment of invoicing, while reporting allows sending later within the window.

What your system needs technically

• Invoices in the approved XML format (UBL 2.1), or PDF/A-3 with embedded XML.
• A QR code on the invoice.
• A cryptographic stamp on every invoice.
• Invoice chaining: a unique ID (UUID), a counter, and the hash of the previous invoice.
• Device onboarding with a code from the Fatoora portal, to get a stamping certificate.
• Secure, retrievable storage of your invoices.

Before going live, test in the developer sandbox ZATCA provides.

You have three options

1. Ready-made compliant accounting software: easiest if your setup is simple.
2. An integration middleware: a service between your system and the platform, suited to systems you'd rather not change much.
3. Direct integration with your existing system: suited to custom systems and high invoice volumes.

If your store runs on a ready-made platform, check what it covers and what's left to you. Compare the options in Salla, Zid or a custom store.

Common mistakes

• Missing customer data: B2B invoices need the buyer's VAT number and address, and older systems often don't collect them.
• Credit and debit notes: many forget these go through the same process.
• Multiple branches and devices: every point of issue needs onboarding.
• Internet outages: you need a plan for resending, especially with the reporting window.
• Broken chaining: editing or deleting an invoice breaks the chain of hashes.
• Leaving it to the last week: integration testing takes longer than you'd expect.

Where to start

1. Confirm your wave and deadline.
2. Check whether your current system collects the required data.
3. Decide how you'll integrate.
4. Test in the sandbox, then onboard your devices.
5. Train your team on credit notes and errors.

Because invoices contain customer data, include them in your PDPL checklist.

Have a custom system that needs connecting to Fatoora? Get in touch and I'll take a look.