ZATCA Outlines Criteria for E-Invoicing Integration in Wave 19
The Zakat, Tax and Customs Authority (ZATCA) has officially outlined the criteria for selecting taxpayers who will be included in the 19th Wave for the "Integration Phase" of E-invoicing in Saudi Arabia. This development is a significant step in the Kingdom’s ongoing efforts to modernize and streamline its tax system, specifically in relation to the implementation of mandatory electronic invoicing for VAT-registered businesses.
Overview of ZATCA’s Announcement
ZATCA's recent announcement provides clarity on which businesses are required to comply with the E-invoicing regulations under the "Integration Phase." As per the guidelines, the 19th Wave will target all taxpayers whose taxable revenues during 2022 or 2023 exceeded SAR 1.75 million. These businesses are now obligated to integrate their invoicing systems with the Fatoora platform, which serves as the central electronic invoicing platform for the Kingdom.
Key Dates and Compliance Requirements
ZATCA has made it clear that the deadline for compliance is 30 September 2025. All businesses falling under the 19th Wave, based on their revenue figures, must complete the necessary integration of their invoicing systems with the Fatoora platform by this date. Failure to meet this deadline could result in penalties, as ZATCA aims to ensure a smooth and timely transition for businesses operating in the Kingdom.
Why the Integration Phase is Important for Businesses
The introduction of the Integration Phase aligns with Saudi Arabia’s Vision 2030, which emphasizes digitization and modernization of public services, including the tax system. With real-time VAT invoice verification, businesses will be able to avoid delays, reduce paperwork, and enhance operational efficiency.
This step is crucial for improving the accuracy and transparency of VAT collection, reducing tax evasion, and improving the overall efficiency of the tax system in Saudi Arabia. By fully automating the invoicing process, ZATCA aims to minimize manual errors, enhance compliance, and increase the speed of VAT transactions.
Preparing for Compliance
For businesses in the 19th Wave, it’s important to begin preparations as soon as possible. This may involve upgrading invoicing software, conducting system tests, and ensuring that all necessary resources are in place to comply with the integration requirements. Businesses should also familiarize themselves with the detailed technical guidelines provided by ZATCA and consult with experts or providers to ensure that their systems are ready for integration.
Conclusion
The announcement by ZATCA about the 19th Wave of the Integration Phase is a crucial step in Saudi Arabia's move toward a fully digital tax system. By 30 September 2025, businesses whose revenues exceeded SAR 1.75 million in 2022 or 2023 will be required to integrate their invoicing systems with the Fatoora platform. This phase will introduce more stringent requirements compared to the previous phase, offering both challenges and opportunities for businesses in the Kingdom.