With Saudi Arabia’s digital transformation in full swing, e invoice phase 2 is no longer optional. It’s mandatory for all VAT-registered businesses. But the real question is: is your business ready?
This guide walks you through what e invoice phase 2 means, how to assess your readiness, and how to avoid major risks.
What Is E Invoice Phase 2?
Also known as the Integration Phase, e invoice phase 2 requires direct system integration between your invoicing software and the ZATCA’s FATOORA platform.
In contrast, the Generation Phase (phase 1) only required businesses to issue and store e-invoices locally, with no real-time submission.
In e invoice phase 2, businesses must submit invoices in real time with digital signatures and QR codes embedded in each invoice.
What Wave Are You In? How to Know Your Activation Date
ZATCA is implementing e invoice phase 2 in waves. Each wave includes businesses based on annual revenue, with official notices sent to affected entities.
For instance, Wave 23 includes all businesses with taxable revenue exceeding SAR 750,000 in any of the years: 2022, 2023, or 2024. Their deadline for compliance is March 31, 2026.
Also read: Important Dates for e Invoicing in KSA in 2025
Readiness Requirements for E Invoice Phase 2
Technical Requirements:
- E-invoicing system compliant with ZATCA regulations
- Invoice formats must be XML or PDF/A-3
- Invoices must include a digital signature and QR code
- Direct API integration with FATOORA platform
Administrative Requirements:
- VAT registration must be completed
- Valid tax identification number
- Updated business data with ZATCA
- Compliance with required invoice elements
Quick Checklist: Is Your Business Ready?
Answering “No” to any of the questions below means your business may not be ready for e invoice phase 2:
- Do you have an invoicing system that outputs XML invoices?
- Have you integrated your system directly with FATOORA?
- Do your invoices include a digital signature, QR code, and buyer/seller data?
- Is your finance team trained on new invoicing workflows?
- Have you tested invoice submission and received ZATCA confirmations?
What Happens If You Are Not Ready?
Failing to meet e invoice phase 2 requirements can lead to:
- Fines up to SAR 50,000
- Daily operations disrupted by invoice rejections
- Loss of trust with customers and partners
- Delays in accurate VAT filings
Why the Grace Period Is a Golden Opportunity
ZATCA has extended the penalty exemption initiative until December 2025. This gives businesses extra time to comply without financial penalties.
The exemption covers:
- Late registration and return submission fines
- On-site inspection penalties related to e invoicing
- Errors in VAT return corrections
Taking advantage of this period allows smooth e invoice phase 2 implementation with reduced stress and zero penalties.
Also read: E Invoice Management in Saudi Arabia, A Startup’s First-Year Story
How EZ Integrated Helps You with E Invoice Phase 2
As an authorized provider, EZ Integrated offers flexible solutions to ensure your full compliance with e invoice phase 2.
Our services include:
- Fast and secure API integration with FATOORA
- Ready-to-use e-invoicing systems for any business type
- Employee training on new e invoicing processes
- Ongoing technical support for updates and troubleshooting
E invoice phase 2 is not a future requirement – it’s a present obligation. Early readiness protects your business from penalties and streamlines your financial operations.
Don’t wait. Contact EZ Integrated today and ensure your business is fully compliant. Book your free consultation now and make compliance easy