Saudi Arabia

E-invoices are mandatory for VAT-registered businesses. Overseen by ZATCA, e-invoicing enhances transparency and streamlines operations.
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Implementation of mandatory e-invoicing in Saudi Arabia

Saudi Arabia e-invoicing Saudi Arabia is implementing a two-phase mandatory e-invoicing system across all economic sectors, led by the Zakat, Tax and Customs Authority (ZATCA):
  • December 4, 2021 – Phase 1 ("Generation Phase"): All VAT-registered businesses in Saudi Arabia were required to begin issuing electronic invoices instead of paper invoices. This phase mandated the use of structured formats, inclusion of required fields (like QR codes), and the use of compliant e-invoicing solutions. However, no real-time submission to authorities was required yet.
  • January 1, 2023 – Phase 2 ("Integration Phase"): Businesses exceeding a certain revenue threshold (initially SAR 3 billion, then progressively lower) were required to integrate their e-invoicing systems with ZATCA’s Fatoora Platform. Invoices must be cleared in real time or reported within 24 hours of issuance. ZATCA provides specific APIs and security protocols for integration.
  • 2024–2025: Phase 2 is being gradually extended to medium and small-sized businesses in waves. ZATCA publishes lists of affected taxpayers and implementation dates several months in advance. All covered taxpayers must comply with both generation and integration requirements, including system readiness and digital certificate installation.
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Compliance dates by revenue threshold (SAR)

Saudi Arabia has implemented a phased approach to e-invoicing compliance, with deadlines based on annual revenue thresholds. Below is the timeline for businesses to comply with the regulations:
Wave Annual Revenue Threshold (SAR) Compliance Date
1. Over 3 billion Jan 1, 2023
2 Over 500 billion Jul 1, 2023
3 Over 250 billion Oct 1, 2023
4 Over 150 billion Nov 1, 2023
5 Over 100 billion Dec 1, 2023
6 Over 70 billion Jan 1, 2024
7 Over 50 billion Feb 1, 2024
8 Over 40 billion Mar 1, 2024
9 Over 30 billion Jun 1, 2024
10 Over 25 billion Oct 1, 2024
11 Over 15 billion Nov 1, 2024
12 Over 10 billion Dec 1, 2024
13 Over 7 billion Jan 1, 2025
14 Over 5 billion Feb 1, 2025
15 Over 4 billion Mar 1, 2025
16 Over 3 billion Apr 1, 2025
17 Over 2.5 billion Jul 31, 2025
18 Over 2 billion Aug 31, 2025

Who needs e-invoices in Saudi Arabia?

  • Large Enterprises: Must integrate with Fatoora for issuing and validating invoices.
  • Small and Medium Enterprises (SMEs): Gradually included in the rollout.
  • Non-resident businesses: Currently exempt, but future obligations may apply for transactions with Saudi entities.

E-Invoicing vs. E-Billing

Aspect E-Invoicing E-Billing
Regulation Mandatory (ZATCA) Not regulated for compliance
Purpose Tax compliance Internal/customer interactions
System Integration Required (Fatoora) Not required

Key features of Saudi Arabia’s e-invoicing system

  • Submission via Fatoora: Businesses must submit invoices in XML format.
  • Validation: ZATCA ensures compliance and issues cryptographic stamps and hash values.
  • Archiving: Invoices must be stored electronically for 6 years for audits.

E-Invoicing dataset

  • Buyer/Seller IDs: VAT identification numbers.
  • Invoice Details: Invoice number, issue date, and payment terms
  • Goods/Services: Descriptions, quantities, unit prices, and VAT details.
  • Taxes: Detailed VAT rates and amounts
  • Transaction Info: Total payable amount, payment method, and currency.
  • QR Code: Mandatory for simplified invoices.

E-invoicing across transaction types

  • B2B: TransactionsMandatory validation via Fatoora ensures VAT compliance and reduces manual errors.
  • B2C:  Transactions Simplified e-invoices with QR codes are required for consumer transactions.
  • B2G:  Transactions Mandatory for government transactions, ensuring transparency and compliance.

Penalties for non-compliance

  • Fines: €1,250–€12,500 per violation.
  • Operational Disruptions: Rejected invoices can delay payments and negatively impact cash flow.
  • Legal Risks: Repeated violations may lead to audits, legal action, and reputational damage.
Stay ahead of the e-invoicing regulations with our easy-to-use platform. Book a free demo today and see how we can help you streamline your invoicing process while ensuring full compliance with Saudi Arabia e-invoicing laws.  
April 17, 2025 279
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