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ZATCA Announced Wave 2 Under Phase 2 of e-Invoicing in Saudi Arabia

Updated on: Apr 24th, 2023


5 min read

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Zakat, Tax and Customs Authority (ZATCA) announced the set of targeted taxpayers in the second wave to implement phase 2 (integration phase) of e-invoicing in Saudi Arabia. It clarified that the Value Added Tax (VAT) registered taxpayers whose turnover was more than SAR 500 million during 2021 would fall under wave 2 of the integration phase.

Hence, wave 2 applicable taxpayers should start integrating their e-invoicing solutions with the Fatoora portal from 1st July 2023. Also, they must complete the integration by 31st December 2023.

Wave 2 under phase 2 of Saudi e-invoicing

ZATCA stated that phase 2 requires additional requirements, and the most important are:

  • Integrating taxpayers' e-invoicing solutions with the Fatoora portal
  • Issuing electronic invoices following the specific format
  • Including additional fields in the invoice

As earlier informed by ZATCA, they would implement phase two of e-invoicing in waves. Also, they would inform the applicable taxpayers about their waves at least six months before the integration date.

Accordingly, ZATCA notified wave 1 under phase 2 in June 2022, stating that the taxpayers whose turnover is more than SAR 3 billion must start integration from 1st January 2023.

ZATCA stated that the integration phase of e-invoicing is an extension of the economic development and digital transformation taking place in Saudi. Also, ZATCA looks at phase 2 as a continuation of the success story that began with the generation phase (phase 1) of e-invoicing.

Phase 1 of e-invoicing in Saudi Arabia achieved positive results; most importantly, it raised the level of consumer protection in the country. Also, the authority witnessed great awareness of taxpayers during the implementation of the generation phase.

ZATCA implemented phase 1 of e-invoicing from 4th December 2021, which obliged all VAT-registered taxpayers to:

  • Stop generating handwritten invoices 
  • Avoid computer-generated invoices through text editing software,
  • Adopt a ZATCA-compliant e-invoicing solution
  • Store e-invoices and related Credit or Debit Notes (CDNs)
  • Comply with QR code and other requirements.

How can ClearTax help you comply with wave 2 under phase 2?

ClearTax helps you integrate ERP/POS with ZATCA with minimal changes and enables you to comply with wave 2 under phase 2. 

  • Generate error-free invoices with 150+ smart data validations.
  • Generates UUID, invoice hash, invoice counter value, and QR code & converts invoice into specified XML format.
  • Submits invoice data for clearance/reporting & receives back validated XML from ZATCA.
  • Adds phase 2 QR code & certified XML into an existing invoice to generate final PDF A/3 invoice.
  • Automatically send the final PDF A/3 invoice via email to the customer.
  • Archiving data for up to six years on SLA-based cloud servers.

Click here to get a demo of the ClearTax e-invoicing solution to comply with wave 2 under phase 2.