ZATCA Wave 25: Is Your Business Ready for E-Invoicing Integration by 1 February 2027?
What ZATCA announced
On 24 July 2026, the Zakat, Tax and Customs Authority (ZATCA) announced Wave 25 of Phase 2 of e-invoicing, known as the “Integration” phase. Under this wave, taxpayers whose revenues subject to VAT exceeded SAR 187,500 in any of the years 2022, 2023, 2024 or 2025 must integrate their e-invoicing solutions with the Fatoora platform by 1 February 2027.
That threshold is exactly half of the previous wave’s. It means Phase 2 is now reaching a large number of small businesses: neighbourhood shops, small contractors, clinics, online stores and service providers that many people assumed would never be affected.
You can follow official updates on the ZATCA e-invoicing page. For a summary of the announcement, see this VATupdate news report.
How Wave 25 compares to recent waves
The thresholds have been dropping quickly. Here are the last three waves:
| Wave | VAT-subject revenue threshold | Integration deadline |
|---|---|---|
| Wave 23 | > SAR 750,000 | 31 March 2026 |
| Wave 24 | > SAR 375,000 (in 2022, 2023 or 2024) | 30 June 2026 |
| Wave 25 | > SAR 187,500 (in 2022, 2023, 2024 or 2025) | 1 February 2027 |
The trend is clear: each wave pulls in businesses of roughly half the size of the previous one. Even if you are below the current threshold, it is reasonable to expect your turn to come.
Who is in scope
Two details catch many business owners off guard.
Eligibility is checked year by year. ZATCA looks at whether your VAT-subject revenue exceeded SAR 187,500 in any single year from 2022 to 2025. You do not need to exceed it every year, and it is not an average. One strong year, such as a large project in 2023, can be enough to bring you into scope even if business has been quieter since.
ZATCA notifies you directly. Targeted taxpayers receive a notification from ZATCA at least six months before their integration date. That notice is the authoritative source for your obligation and deadline. If you received one, treat its date as fixed. If you think you are in scope but have not been notified, check your account on the ZATCA portal and ask your accountant rather than guessing.
Below the threshold? Businesses that do not meet the Wave 25 criteria stay in Phase 1 (the “Generation” phase) for now: they must still issue compliant electronic invoices, but they do not yet need to connect to Fatoora. Expect further waves, each announced with at least six months’ notice.
What “integration” actually means
Phase 1 was about producing invoices electronically. Phase 2 is about your systems talking to ZATCA’s systems directly. In practice, an integrated solution must:
- Produce invoices in UBL 2.1 XML, a structured format that machines can read, not just a PDF.
- Apply a cryptographic stamp to each invoice, proving it came from your registered solution and was not altered.
- Assign a UUID (unique identifier) to every invoice.
- Include a QR code on the invoice.
- Connect to Fatoora through an API, with two different flows:
- Standard tax invoices (B2B) are sent for clearance in real time. ZATCA validates them before you share them with your buyer.
- Simplified tax invoices (B2C) are reported within 24 hours of being issued.
The clearance flow is the one that changes daily operations most. If your system cannot reach Fatoora, or an invoice fails validation, you cannot simply hand it to a business customer and fix it later. Invoicing becomes part of a live connection, not an afterthought.
Your checklist before 1 February 2027
Work through these steps in order. Most of them take longer than businesses expect.
- Check your revenue for each year, 2022 to 2025. Pull your VAT returns and confirm whether any single year exceeded SAR 187,500 of VAT-subject revenue.
- Check for a ZATCA notification. Look in your ZATCA account and registered email. If you have a notice, note the exact date it gives you.
- Audit every system that issues invoices. That includes your ERP, accounting software, POS terminals, e-commerce store and any custom tools. Ask each vendor directly whether the product supports Phase 2 integration, and ask for it in writing.
- Onboard your solution and devices. Through the Fatoora portal, each invoicing solution or device must be onboarded to obtain its cryptographic stamp certificates. Plan this per branch and per device.
- Test in the sandbox / simulation environment. ZATCA provides test environments. Run real scenarios: standard invoices, simplified invoices, credit notes, debit notes and rejected invoices.
- Train your staff. Cashiers, accountants and sales teams need to know what happens when an invoice is rejected or the connection drops, and who fixes it.
- Plan for branches and POS devices. Multi-branch businesses must make sure every location and every terminal is covered, not just head office.
- Leave a buffer. Aim to go live weeks before the deadline, not on the day itself.
Common pitfalls
Integrating at the last minute. Vendors and consultants get busy near every deadline. Testing, onboarding and fixing data issues all take time, and problems tend to surface only once real invoices start flowing.
Relying on spreadsheets or manual invoices. Excel templates and hand-written invoices cannot produce stamped UBL 2.1 XML or connect to an API. If this is how you invoice today, you need a proper system, not a workaround.
Custom systems that can’t produce UBL XML. Many businesses run an in-house tool built years ago. Retrofitting it to generate valid XML, sign invoices and handle clearance responses is often harder than it looks.
Forgetting branches and devices. A business might integrate its main accounting system and overlook the POS terminals in a second branch or a sales app used in the field. Every point that issues invoices counts.
Why a proper ERP beats bolt-on fixes
It is tempting to add a small “e-invoicing connector” on top of whatever you already use. Sometimes that works. But e-invoicing touches far more than the invoice itself:
- Clean master data. Customer VAT numbers, addresses and product tax categories must be correct, or invoices get rejected.
- One source of truth. When sales, inventory, invoicing and accounting live in one system, a credit note or a return is handled once, consistently.
- Fewer moving parts. Every extra integration layer is another thing that can break, another vendor to chase and another log to check.
- Future rules. ZATCA has updated its requirements over time. A maintained ERP absorbs those changes centrally; a patchwork of tools needs each piece updated separately.
Treat Wave 25 as an opportunity to fix your invoicing at the root rather than patching it for one deadline.
How Cortex can help
At Cortex Software we build and implement ERP systems that handle Saudi e-invoicing as part of everyday operations, from sales and inventory to accounting, with a team working with clients in Jeddah and across the Kingdom. If you would like a quick review of your current setup against Phase 2 requirements, see our Saudi Arabia page or request a quote.
Rules and deadlines change. Always confirm your obligations with ZATCA and your accountant. Last reviewed: October 2026.
