ZATCA Announces Criteria for Wave 18 of E-Invoicing Integration in Saudi Arabia

The Saudi Arabian Zakat, Tax and Customs Authority (ZATCA) has recently unveiled the criteria for taxpayers to join the "Integration Phase" of E-invoicing under Wave 18. This marks a significant step in the kingdom’s push toward digital transformation, and businesses must take note of the upcoming deadlines and requirements to ensure compliance.

What is Wave 18?

Wave 18 includes all taxpayers who have VAT revenues exceeding SAR 2 million in either 2022 or 2023. These businesses will be required to integrate their E-invoicing solutions with the ZATCA's Fatoora platform by the deadline of August 31, 2025. This phase is part of the gradual roll-out of the E-invoicing system, which aims to enhance tax collection processes, reduce fraud, and promote transparency.

What is the Integration Phase?

The Integration Phase involves a more advanced step than the initial Phase One. Businesses within Wave 18 must integrate their invoicing systems directly with ZATCA's Fatoora platform. This will require the submission of E-invoices in a specific format, with additional mandatory fields to ensure full compliance. By the end of the integration process, businesses will no longer be able to manually issue invoices but must follow a standardized, automated process.

Phased Implementation with Notice Period

One of the key aspects of this transition is the phased implementation approach. Each wave of businesses will receive at least six months' notice before they are expected to comply with the requirements. This gives businesses ample time to prepare, adapt their systems, and ensure they can meet the new standards.

E-Invoicing Benefits

E-invoicing isn’t just about compliance; it offers a host of benefits for both businesses and consumers. By automating invoicing processes, it reduces human errors, enhances data accuracy, and improves the overall efficiency of tax administration. Additionally, it helps protect consumers from potential fraud, ensuring that transactions are transparent and traceable.

A Look Back at Phase One

To understand where we are now, it’s helpful to recap Phase One of the E-invoicing system. Phase one focused on the basic requirement for businesses to generate E-invoices that adhered to technical standards set by ZATCA. While the Integration Phase takes this a step further, Phase One laid the foundation for the transition to a fully digital invoicing system.

As Wave 18 approaches, businesses should begin preparing to meet the integration deadlines. Understanding the requirements and benefits of E-invoicing will help ensure a smooth transition and help businesses stay ahead in an increasingly digital world.