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ZATCA Announced Wave 3 Under Phase 2 of Saudi Arabia e-Invoicing

Updated on: Apr 24th, 2023


6 min read

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Zakat, Tax and Customs Authority (ZATCA) announced the targeted taxpayers in the third wave to implement phase 2 Saudi Arabia e-invoicing. It clarified that the Value Added Tax (VAT) registered taxpayers whose turnover was more than SAR 250 million and less than SAR 500 million during 2021 or 2022 would fall under wave 3 of phase 2 (integration phase).

Hence, wave 3 applicable taxpayers should start integrating their e-invoicing solutions with the Fatoora portal from 1st October 2023.

Wave 3 under phase 2 of Saudi Arabia e-invoicing

ZATCA stated that phase 2 requires additional requirements such as:

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

ZATCA announced they would implement phase two of e-invoicing in waves by informing the applicable taxpayers at least six months before the integration date.

Accordingly, till now, ZATCA notified the below waves:

  • Wave 1 under phase 2: VAT-registered taxpayers whose turnover is more than SAR 3 billion in 2021 must start integration from 1st January 2023.
  • Wave 2 under phase 2: Taxpayers registered under Saudi VAT having a turnover of more than SAR 500 million and less than SAR 3 billion in 2021 must integrate with ZATCA’s Fatoora portal starting 1st July 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 phase 1 (generation phase) of e-invoicing.

As per ZATCA, Phase 1 of Saudi Arabia’s e-invoicing achieved positive results. It raised the level of consumer protection in the country, and the authority witnessed great awareness among 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 3 under phase 2?

ClearTax helps you integrate ERP/POS with ZATCA with minimal changes and enables you to comply with wave 3 under phase 2. 

  • Generate error-free invoices with 150+ smart data validations.
  • Generates key fields to generate invoices, such as UUID, invoice hash, invoice counter value, and QR code.
  • Submits data for clearance/reporting & receives back validated XML from ZATCA.
  • Adds phase 2 QR code & validated XML into an existing invoice to generate final PDF A/3 invoice.
  • Automatically emails the final PDF A/3 invoice to your customer.
  • Data archival for up to six years on SLA-based cloud servers.

Click here for a demo of the ClearTax e-invoicing solution and comply with wave 3 under phase 2.