ZATCA E-Invoicing in Saudi Arabia: What Businesses Need to Know

Saudi Arabia's shift to mandatory electronic invoicing — known as ZATCA e-invoicing or Fatoora — is one of the most significant changes to hit GCC business operations in the past decade. If your company is registered for VAT in the Kingdom, you are already required to issue and store invoices electronically. The question is no longer whether to comply, but whether your invoices contain every field ZATCA expects.

What Is ZATCA and What Is Fatoora?

The Zakat, Tax and Customs Authority (ZATCA, formerly GAZT) is the Saudi government body responsible for tax administration. In December 2021 it launched the e-invoicing initiative branded Fatoora, designed to reduce the shadow economy, improve VAT compliance, and bring real-time transaction visibility to the tax authority.

The rollout happens in two distinct phases — and confusing them is one of the most common mistakes businesses make.

Phase 1: Generation (Live Since December 2021)

Phase 1 — the Generation phase — applies to all VAT-registered businesses in Saudi Arabia, regardless of size or revenue. Since 4 December 2021, paper and handwritten invoices are no longer acceptable. Every invoice must be:

• Generated by an electronic system (no Word docs, no scanned PDFs of handwritten notes)
• Stored electronically in a tamper-resistant format
• Issued in Arabic (English is allowed as a secondary language)
• Accompanied by a QR code for simplified tax invoices (B2C)

If you're a freelancer, a small shop, or a multinational — Phase 1 already applies to you.

Phase 2: Integration (Rolling Out in Waves Since January 2023)

Phase 2 — the Integration phase — adds a real-time clearance step. Your invoicing system must connect to ZATCA's Fatoora platform via API, and every invoice must be cryptographically signed and either cleared (B2B) or reported (B2C) within 24 hours of issuance.

ZATCA is rolling Phase 2 out in waves based on annual revenue. Businesses are notified individually at least six months before their wave goes live, so check your registered email regularly. As of 2026, more than twenty waves have been announced, covering businesses with revenue above ~3 million SAR — and the threshold continues to drop.

Required Fields on a Compliant Invoice

Whether you're in Phase 1 or Phase 2, every tax invoice must contain at minimum:

• Seller name, address, and 15-digit VAT registration number
• Buyer name and VAT number (mandatory for B2B / standard tax invoices above 1,000 SAR)
• Invoice issue date and time
• Unique sequential invoice number
• Description, quantity, and unit price for each line item
• Subtotal, VAT rate (15%), VAT amount, and total inclusive of VAT — clearly itemized
• Currency (SAR by default; foreign currency requires the SAR equivalent)
• QR code encoding seller name, VAT number, timestamp, total, and VAT amount (TLV format, base64-encoded)
• For Phase 2: a cryptographic stamp (XAdES signature) and the ZATCA-returned UUID

Simplified vs. Standard Tax Invoices

ZATCA distinguishes between two invoice types:

• Simplified Tax Invoice — issued to consumers (B2C). Must include a QR code. In Phase 2 it is reported to ZATCA within 24 hours.
• Standard Tax Invoice — issued to other VAT-registered businesses (B2B). Must include the buyer's VAT number. In Phase 2 it must be cleared by ZATCA before being shared with the customer.

Who Is Affected?

Phase 1 obligations apply to every taxable person resident in Saudi Arabia — including third parties issuing invoices on behalf of a Saudi VAT-registered entity. Non-resident businesses are excluded. If you are a freelancer registered for VAT (revenue above 375,000 SAR/year, or voluntarily above 187,500 SAR), the same rules apply to you as to a large enterprise.

How to Generate a Compliant Invoice on Productivities.net

Our Invoice Generator is a free, browser-based tool designed with the Phase 1 field requirements built in. You enter seller and buyer details, line items, and VAT rate; the tool calculates totals, formats the invoice in Arabic and English, embeds the required QR code, and lets you download a clean PDF — all without uploading any of your data to a server.

For Phase 2 (integration / clearance), you will additionally need a ZATCA-approved e-invoicing solution provider registered to call the Fatoora API on your behalf. Our generator covers Phase 1 compliance and is a great starting point for freelancers, small businesses, and anyone not yet inside a Phase 2 wave.

Common Pitfalls to Avoid

• Missing QR code on B2C invoices — automatic non-compliance, even in Phase 1.
• Hand-typed VAT numbers — always copy from the official certificate; a single wrong digit invalidates the invoice.
• Storing only PDFs, not structured data — Phase 2 requires XML (UBL 2.1). Plan ahead.
• Forgetting the Arabic requirement — at least the seller name, item descriptions, and totals must appear in Arabic.
• Editing issued invoices — once issued, an invoice can only be corrected via a credit note or debit note. Never overwrite.

Try the Invoice Generator

Ready to issue a clean, ZATCA-aligned invoice in under a minute? Open our free Invoice Generator — it runs entirely in your browser, supports Arabic and English, includes 15% VAT calculations and the required QR code, and never uploads your customer or revenue data to any server.

For wave-specific Phase 2 obligations, log in to your ZATCA portal or speak to a licensed tax advisor.