The ZATCA Phase 2 requirements now apply to businesses in Waves 19 and 20. These establishments must complete their integration with the FATOORA platform to ensure compliance with e-invoicing regulations.
This article explores the e-invoicing integration process, key deadlines for Waves 19 and 20, and practical steps businesses must take to meet the ZATCA Phase 2 requirements efficiently.
What is E-Invoicing Integration & What Does Phase 2 Involve?
E-invoicing integration connects a company’s invoicing system to ZATCA’s FATOORA platform, enabling real-time invoice validation before issuance.
Saudi Arabia’s e-invoicing system consists of two phases:
1. Generation Phase (Phase 1)
Launched on December 4, 2021, this phase mandated businesses to issue digital invoices instead of paper-based ones.
Key requirements included:
– Essential invoice fields (invoice number, issue date, supplier and buyer details, QR code)
– Compliance with structured electronic formats.
2. Integration Phase (Phase 2)
Started on January 1, 2023, this phase applies progressively based on business revenue. Under the ZATCA Phase 2 requirements, businesses must integrate their invoicing systems with FATOORA.
Additional requirements include:
– Unique Invoice Identifier (UUID)
– VAT registration number
– Tax-inclusive subtotal
Also read: E Invoice Mandatory Fields Checklist for Saudi Businesses
ZATCA Phase 2 Requirements for Wave 19
ZATCA announced that businesses with revenue exceeding SAR 1.75 million in 2022 or 2023 fall under Wave 19. These businesses must complete their e-invoicing integration by September 30, 2025.
To avoid penalties, companies should begin preparations early. ZATCA will send official notifications outlining the specific Phase 2 requirements and deadlines.
ZATCA Phase 2 Requirements for Wave 20
For Wave 20, the revenue threshold is SAR 1.5 million (2022 or 2023). These businesses must finalize their integration by October 31, 2025.
Just like Wave 19, ZATCA will notify affected businesses and provide guidance to ensure compliance before the deadline.
How to Prepare for ZATCA Phase 2 Requirements
To ensure compliance with ZATCA Phase 2 requirements, businesses must follow these steps:
1. Assess Current Invoicing System
Evaluate whether your existing invoicing system meets Phase 2 requirements by:
– Checking system compatibility with ZATCA’s FATOORA platform.
– Ensuring all mandatory invoice fields are included.
– Verifying support for XML or PDF/A-3 formats.
2. Choose a Certified E-Invoicing Provider
Partnering with a ZATCA-approved provider like EZ Integrated ensures smooth compliance.
Key factors to consider when selecting a provider:
– Direct integration with your invoicing system.
– High-security standards to protect financial data.
– 24/7 technical support for seamless operation.
3. Train Employees on the New System
A successful transition requires employee training. Businesses should:
– Organize workshops for finance teams.
– Provide hands-on training for invoice issuance and validation.
– Ensure teams understand ZATCA Phase 2 requirements and compliance steps.
Also read: How to Conduct Effective E Invoice Training for Employees
4. Test the System Before Full Implementation
Before integration, conduct system tests by:
– Generating test invoices for ZATCA validation.
– Checking data accuracy and error-free processing.
– Evaluating system speed and efficiency.
5. Stay Updated with ZATCA Regulations
ZATCA continuously updates e-invoicing regulations. Businesses must:
– Regularly visit ZATCA’s official website.
– Subscribe to e-invoicing newsletters.
– Coordinate with invoicing providers for system updates.
Simplify ZATCA Phase 2 Compliance with EZ Integrated
E-invoicing integration is a crucial step toward tax compliance and operational efficiency. With EZ Integrated, businesses can ensure:
– Seamless integration with ZATCA’s FATOORA platform.
– 24/7 technical support to resolve any issues.
– Comprehensive employee training for a smooth transition.
– Robust security measures to protect invoicing data.
Ensure Your E-Invoicing Compliance Today! Need expert assistance to meet ZATCA Phase 2 requirements? Contact EZ Integrated now for a free consultation and let our specialists streamline your e-invoicing integration.