Everything You Need to Know About Phase 2 E-Invoicing

What is Phase 2 of E-Invoicing?

Phase 2 of the e-invoicing system, also known as the "Integration Phase," is the next step in the digital transformation of invoicing in Saudi Arabia. ZATCA (Zakat, Tax, and Customs Authority) issued this phase as part of Saudi Vision 2030 to enhance financial transparency and combat tax evasion.

In Phase 1, businesses were only required to issue electronic invoices in a specified format. In Phase 2, businesses must directly integrate their e-invoicing systems with ZATCA's Fatoora platform. This means every invoice issued must be sent to and validated by the authority in real-time.

Key Technical Requirements

The technical requirements for Phase 2 include several important aspects that every business must comply with:

First: API Integration

The e-invoicing system must be capable of direct connection to the Fatoora platform through approved APIs. This integration allows automated invoice submission and approval without manual intervention.

Second: Digital Signature and Electronic Stamp

Every electronic invoice must contain a digital signature ensuring its authenticity and integrity. This is done through digital certificates issued by authorized entities, and the signature must comply with the encryption standards specified by ZATCA.

Third: QR Code

Every invoice must include a QR code containing essential invoice data in encrypted TLV format. This code facilitates invoice verification by consumers and regulatory authorities.

Fourth: Compliant XML Format

Invoices must be issued in XML format compliant with the UBL 2.1 standard adopted by ZATCA. This format ensures data standardization and easy automated processing.

Wave Timeline

ZATCA implements Phase 2 in successive batches called "waves." Each wave targets a specific segment of businesses based on their annual revenue:

• Waves 1-12: Targeted the highest-revenue businesses (over SAR 3 billion) and have been successfully implemented
• Waves 13-20: Target medium-sized businesses with revenues ranging from hundreds of millions to several billions
• Wave 24: Targets smaller businesses with a deadline of June 30, 2026

How Does FatooraPro Help?

FatooraPro is specifically designed to help Saudi businesses achieve full compliance with Phase 2 requirements. The system provides direct integration with the Fatoora platform, automatic digital signing, QR code generation, and XML-compliant invoice issuance — all through an easy-to-use Arabic interface.

Don't wait until the last minute. Start today preparing your business for Phase 2 e-invoicing with FatooraPro, and avoid non-compliance fines that can reach SAR 50,000.